I Got Rhythm — Project Failure and the Criticality of Moving from Ad Hoc

The initial period of project ramp-up often is a period of intense activity and, in many cases, chaos.  People are brought into unfamiliar surroundings and are dealing with both unfamiliar peers and management structure.  The business environment is new and in the developmental phases, resources are being identified and applied to the project tasks, roles and responsibilities are being defined and documented, methods of planning and assessment are yet to be determined, and the project plan and goals must be decomposed and then recomposed to ensure fidelity to the scope of the effort.  Much of what is done on a day-to-day basis, despite the plan that was devised regarding ramp-up constitute ad hoc adjustments to the reality being faced.  As a wise general once said:  “No battle plan survives contact with the enemy.”  The enemy, in this case, being entropy.

If we are dealing with the introduction of new technology that forgoes development in an established system, such as Commercial-off-the-Shelf (COTS) environments, we are dealing with situations that involve not only implementation and training of personnel, but adjustments to established systems and procedures, and a period of overlap between old established pathways and the new way of doing things.  In these cases we will see the introduction of uncertainty regarding the effect of the new technology on the organization’s social systems and relationships, adjustments in expectations among personnel, and a very real impact to productivity and communication systems.  The disruptive effect of new technologies in an established system is equivalent to an organizational intervention involving a major process improvement (or series of interventions).  Organizations will try to handle the disruptive risks through phasing and incremental change, but the difference between the old technology and the new may be so significant that, even in cases where less effort and more powerful functionality is anticipated, that there is no alternative than to reinvent the way that business is conducted in order to realize the full benefit of the new technology.

It is during the initial phases that projects are most vulnerable to dysfunction that will bake in failure, long-run difficulties, or disappointment.  Even where it appears initially that the organization is responding positively a good manager must be aware of the social psychology underlying the results.  During this period it will appear that the system itself is experiencing mood swings.  One day will feel like victory while the next will feel like defeat, and then back again.  Pockets of resistance will appear as managers see push-back from established stakeholders, others will embrace the change and it will appear that the organization is coalescing sooner than expected.  In all of these cases managers and those personnel implementing the change must inform their perceptions by the knowledge that they are dealing with a complex adaptive system that will tend to bias the observations being made during the transition; that is, that the act of observing will influence the perception of the system, and vice versa.  It is during this early stage of the project coalescing that variances in cost and schedule performance will be baked in.

Thus, the effectiveness of the organization to transition away from ad hoc oftentimes will determine the effect of the negative influences during this time.  In the article “Project Rhythm and Successful Project Execution” by C. J. Jang, the author compares establishing a business rhythm to a conductor leading an orchestra, and I would posit that the music analogy is a strong one.  But my issue with it is this:  it is not the rhythm that is problematic but rather the transition period between each segment of our plan.  In music parlance, these are known as “the changes.”  We can speed up or slow down the chord changes in music.  The same goes with projects.  Our application of business rhythm will vary based on the phase in the project.  If we stumble on the changes we not only make bad music but also create problems in projects that will carry forward.  It is not that we cannot recover (see my previous posts on the Affordable Care Act federal on-line marketplace roll-out), but the time and resources devoted to recovery will never be recouped.

For example, when introducing new technology, how do we get from technical and operational implementation in a test environment to systems deployment?  Let us say that our project team has faced the practical challenges needed to establish the test environment but must now begin to phase in stakeholders to become familiar with and in the use of the new technology.  Do we limit ourselves to training a core number of personnel who will phase in the change over time?  How large is this group?  How quickly do we enter this phase?  What part or level of the organization should be included?

The constraints we face, of course, oftentimes will dictate the answer to these questions.  Contract and management commitments and expectations will dictate the plan.  Our schedule dictates when in time we need to achieve particular milestones.  Resource availability will determine the size of the phase execution.

But moving from ad hoc to a business rhythm as smoothly as possible that provides certainty, control, communication, and feedback–and making adjustments in the elements of the business rhythm as one phase passes to another–provides a project with a better chance of success than one that fails to adapt to (and adopt) a more formal and mature structure.  The effective transition to a rhythm ensures that personnel can act autonomously and synchronously in the project’s execution since it provides certainty to personnel in understanding their role, the latitude that they possess, the manner of performance measurement, and the desired end state.

I Heard It Through the Grapevine — Self Certification of Business Systems

Despite the best of intentions web blogging this week has been sparse, my time filled with contract negotiations and responses to solicitations.  Most recently on my radar is the latest proposed DFARS rule to allow contractors to self-certify their business systems.  Paul Cederwall at Pacific Northwest Government Contracting Update blog has has a lot to say about the rule that is interesting but he gets some important things wrong.

To provide a little background, a DFARS requirement that has been in place since May 18, 2011 established six business systems that must demonstrate accountability and traceability in their internal systems to ensure that there is a high degree of confidence in the integrity of the underlying systems of the contractor receiving award of a government contract.  You can find the language here.  Given that this is the taxpayer’s money, while there was a lot of fear and loathing on how the rule would be applied since it included some teeth–the threat of a withhold on payments–most individuals involved in acquisition reform welcomed it as a means of handling risk given that one of the elements of making an award is “responsibility.”  (This is one leg of the “three-legged stool test” that must be passed prior to a contracting officer making an award, the others being responsiveness, and price and price-related factors.  This last could include value determinations.)

The concept of responsibility is a loaded one, calling on the contracting officer to apply judgment, business knowledge and acumen, and analytical knowledge.  The elements, from the Corporate Findlaw site has a very good summary as follows:

“the FAR requires a prospective contractor to (1) have adequate financial resources to perform the contract; (2) be able to comply with the required or proposed delivery or performance schedule; (3) have a satisfactory performance record; (4) have a satisfactory record of integrity and business ethics; (5) have the necessary organization, experience, accounting and operational controls, and technical skills; (6) have the necessary production, construction, and technical equipment and facilities; and (7) be otherwise qualified and eligible to receive an award under applicable laws and regulations.”

Our acquisition systems, especially in regard to extremely large contracts that will turn into the complex projects that I write about here, tend to be pulled in many directions.  The customer, for example, wants what they need and to reduce the procurement lead time as much as possible.  Those who are given oversight responsibility and concern themselves with financial accountability focus on the need for compliance and integrity in the system, and to ensure that funds are being expended for the purpose contracted and in a manner that will lead to the contractually mandated outcome.  The contractors within the competitive range not only bid to win but their proposals are calibrated to take into account considerations of risk, market share and exposure, strategic positioning, and margin.

Thus, the Six Business Systems rule is a way of meeting the legal requirement of determining responsibility, which is part of the contracting officer’s charter, particularly under the real-world conditions imposed by governmental austerity.  But here is the rub.  When I was an active duty Navy contracting officer we had a great deal of resources at our disposal to ensure that we had done our due diligence prior to award.  The military services and the Department of Defense provided auditing resources to ensure the integrity of financial systems, expose rates during the negotiating process to meet the standard of “fair and reasonable,” and to ensure contract compliance and establish reliable reporting of progress based on those audits.

But things have changed and not always for the better.  During the 1980s and after technology was the first agent for change.  As a matter of fact I was the second project manager of the Navy Procurement System project in San Diego during that time and so was there at the beginning.  The people around me were prescient–despite the remonstrations to the contrary–that such digitization of procurement processes would result not only in improvements in the quality of information and productivity, but also reductions in workforce.  The result was that the federal government lost a great deal of corporate knowledge and wisdom while attempting to weed out suspected Luddites.  Hand-in-hand with this technological development came the rise of government austerity, which has become more, not less, severe over the last thirty years.  Thus the public lost more corporate knowledge and wisdom in the areas most sensitive to such losses.

Over this time criticism of the procurement system has seemed like the easiest horse of convenience to beat, especially in the environment of Washington, D.C.  The contracting officer pool is largely inexperienced.  The most experienced, if they last, are largely overworked, which diminishes effectiveness.  New hires are few and far between, especially given hiring and pay freezes.  Internships and mentoring programs that used to compete with the best of private industry have largely disappeared and most training budgets are either non-existent or bare-boned.  The expected procurement “scandals,” the overwhelming majority of which can be directly traced to the conditions described above as opposed to corruption, fraud, waste, or abuse, resulted.

Because of these conditions, the reaction in terms of ensuring integrity within the systems in lieu of finding scapegoats, was to first establish the Business Systems rule, which is in the best tradition of management.  But, given that things became unexpectedly more austere with government shutdowns and sequestration, the agency tasked with enforcing the rule–the Defense Contract Audit Agency (DCAA)–does not have the resources to complete a full review of the systems of the significant number of contractors that provide supplies and services to the U.S. Department of Defense.  Thus, the latest solution was to propose self-certification–one which was also sought by a good many companies in the industry.

There are criticisms coming from two different perspectives on the rule.  The first is that self-certification is charging the fox with watching the hen house.  The 2006-07 housing bubble and resulting banking crisis is an object lesson of insufficient oversight.

The other criticism comes from many in the industry that sought the change.  The rub here is that teeth were imposed in the process, requiring an annual independent CPA audit.  DCAA will review the results of the audit and the methodology used to make the determination of the certification.  This is where I part with PNWC.  The knee-jerk reaction is to question DCAA’s ability to judge whether the audit was completed properly because, after all, they were not “competent” to complete the audits to begin with.  This is a tautology and not a very good one.

As a leader and manager, if I delegate a task (given that I am usually busy on more pressing issues) and put checks and balances in place in the performance of that task, there will still come the time when I want that individual (or individuals) to present me with an accounting of what they did in the performance of that task.  This is called leadership and management.

The legal responsibility of DCAA in this case in their oversight role is to ensure the integrity of the contractor’s systems so that contracting officers can make awards with confidence to responsible firms.  DCAA is also accountable for the judgment and process in providing that certification.  One can delegate responsibility in the completion of a task but one cannot delegate accountability.


Note:  Some formatting errors came out in the initial posting.  Many apologies.

Weekend Summer Music Interlude — Laki Mera

As a youth summer for me consisted of baseball (both watching and playing), tennis, fishing, exploring the south Jersey pine woods, cookouts, and spending time at the beach with family and friends.  After the age of 15 throw in working a summer job to save for college and help my parents make ends meet.

This activity came to me with the background of the radio playing music provided courtesy of the powerhouse New York radio and television broadcasting center.  Summers consisted of anything from jazz to folk to country to rock to pop, and my favorite stations, some of which no longer exist, made the same transition as the society around it:  the now defunct WNEW-AM, WABC-AM, WMCA (with their “Good Guys” lineup), and a host of others.  It was Jack Spector on WMCA who played the first Beatles song on New York radio.

All of this is a way of saying that, while radio has evolved and struggled since those heady days, music goes on as the backdrop to our lives; informing and influencing us in subtle ways, reflecting the world around us, sometimes providing pleasure and sometimes a respite, mirroring our thoughts, our hopes, our passions, and our fears; providing a backdrop to our happiness during good times, and a sanctuary during hard times.

This weekend’s interlude is a band called Laki Mera, a trio out of Scotland that has been making music for 10 years now.  They make what has been described as electro-dream-pop.  They are often compared to the Cocteau Twins, but this seems to me to be an inexact comparison, which speaks to their unique voice and vision.  What they do, I think, is create both acoustic and electronic musical soundscapes that provide the foundation for Laura Donnelly’s beautiful voice that allow our imaginations to follow the lyrics to wherever they may take us.  They have not yet reached great economic success but their music speaks for itself.  Last year they released their third LP entitled “Turn All Memory To White Noise,” which was actually released last summer.  The only videos online include their lyrics.  “Seraphine” is one of the best–a refreshing moment of anticipation wading in a cool stream.  A welcome respite from a disastrous week for the world at large.


Go With the Flow — What is a Better Indicator: Earned Value or Cash Flow?

A lot of ink has been devoted to what constitutes “best practices” in PM but oftentimes these discussions tend to get diverted into overtly commercial activities that promote a set of products or trademarked services that in actuality are well-trod project management techniques given a fancy name or acronym.  We see this often with “road shows” and “seminars” that are blatant marketing events.  This tends to undermine the desire of PM professionals to find out what really gives us good information by both getting in the way of new synergies and by tying “best practices” to proprietary solutions.  All too often “common practice” and “proprietary limitations” pass for “best practice.”

Recently I have been involved in discussions and the formulation of guides on indicators that tell us something important regarding the condition of the project throughout its life cycle.  All too often the conversation settles on earned value with the proposition that all indicators lead back to it.  But this is an error since it is but one method for determining performance, which looks solely at one dimension of the project.

There are, after all, other obvious processes and plans that measure different dimensions of project performance.  The first such example is schedule performance.  A few years ago there was an attempt to more closely tie schedule and cost as an earned value metric, which was and is called “earned schedule.”  In particular, it had many strengths against what was posited as its alternative–schedule variance as calculated by earned value.  But both are a misnomer, even when earned schedule is offered as an alternative to earned value while at the same time adhering to its methods.  Neither measures schedule, that is, time-based performance against a plan consisting of activities.  The two artifacts can never be reconciled and reduced to one metric because they measure different things.  The statistical measure that would result would have no basis in reality, adding an unnecessary statistical layer that obfuscates instead of clarifying the underlying condition. So what do we look at you may ask?  Well–the schedule.  The schedule itself contains many opportunities to measure its dimension in order to develop useful metrics and indicators.

For example, a number of these indicators have been in place for quite some time: Baseline Execution Index (BEI), Critical Path Length Index (CPLI), early start/late start, early finish/late finish, bow-wave analysis, hit-miss indices, etc.  These all can be found in the literature, such as here and here and here.

Typically, then, the first step toward integration is tying these different metrics and indicators of the schedule and EVM dimensions at an appropriate level through the WBS or other structures.  The juxtaposition of these differing dimensions, particularly in a grid or GANTT, gives us the ability to determine if there is a correlation between the various indicators.  We can then determine–over time–the strength and consistency of the various correlations.  Further, we can take this one step further to conclude which ones lead us to causation.  Only then do we get to “best practice.”  This hard work to get to best practice is still in its infancy.

But this is only the first step toward “integrated” performance measurement.  There are other areas of integration that are needed to give us a multidimensional view of what is happening in terms of project performance.  Risk is certainly one additional area–and a commonly heard one–but I want to take this a step further.

For among my various jobs in the past included business management within a project management organization.  This usually translated into financial management, but not traditional financial management that focuses on the needs of the enterprise.  Instead, I am referring to project financial management, which is a horse of a different color, since it is focused at the micro-programmatic level on both schedule and resource management, given that planned activities and the resources assigned to them must be funded.

Thus, having the funding in place to execute the work is the antecedent and, I would argue, the overriding factor to project success.  Outside of construction project management, where the focus on cash-flow is a truism, we see this play out in publicly funded project management through the budget hearing process.  Even when we are dealing with multiyear R&D funding the project goes through this same process.  During each review, financial risk is assessed to ensure that work is being performed and budget (program) is being executed.  Earned value will determine the variance between the financial plan and the value of the execution, but the level of funding–or cash flow–will determine what gets done during any particular period of time.  The burn rate (expenditure) is the proof that things are getting done, even if the value may be less than what is actually expended.

In public funding of projects, especially in A&D, the proper “color” of money (R&D, Operations & Maintenance, etc.) available at the right time oftentimes is a better predictor of project success than the metrics and indicators which assume that the planned budget, schedule, and resources will be provided to support the baseline.  But things change, including the appropriation and release of funds.  As a result, any “best practice” that confines itself to only one or two of the dimensions of project assessment fail to meet the definition.

In the words of Gus Grissom in The Right Stuff, “No bucks, no Buck Rogers.”


Let’s Work Together — The Goal of Contract Negotiations

I’ve been at this acquisition management profession for quite some time, but nothing gives me more pleasure than returning to the basic and necessary process that precedes the management part of contract and project management, which is contract negotiation.  I began as a negotiator as a young U.S. Navy Lieutenant when I was selected as one of the members of what was to be a Navy Procurement Corps.  Over the years politics–both intraservice and otherwise–undermined the Procurement Corps idea, which I still think was and is a good one, but that is the way it goes sometimes.  It has been more than thirty years since that time and the basics of negotiation have served me well over the years.

Negotiations, when they go well, are based on several factors:

a.  The understanding by the parties that each has a common interest or desired outcome that has sufficient value;

b.  Good will, respect, and trust among the parties;

c.  Effective communication;

d.  The ability of the parties to allow the facts or the data to both reveal the areas of mutual acceptability and those factors that are deal breakers;

e.  Flexibility in viewing the negotiation as a process of discovery;

f.  The parties possess the necessary authority to make the outcome of the negotiation binding;

g.  The outcome advances the interests of all parties in the negotiation.

When these factors are missing the negotiation will be difficult and often fail or fail to satisfy the needs or desires of the parties.  Aside from my own experiences, my colleagues in both government and industry often complain of failed or difficult negotiations and their experiences track my own.  The core barriers that undermine the factors listed above seem to most often fall into two main areas; cultural ones based on profession or line of business, and egocentric barriers.  Oftentimes they are one and the same.

Let’s take the cultural issue first.  The most frequent example that I run into that results in difficult or failed negotiations involves attorneys.  I counsel companies and individuals NOT to allow their attorney to drive a negotiation where a positive result is desired.  The reason for this condition lies in the nature of the legal profession as it is currently constituted in the United States (and has been since about 1960).

Attorneys are trained to deal with adversarial situations.  As such, the factors underlying the entire basis of successful negotiation are usually undermined.  I have been in negotiations with attorneys where their knee-jerk reaction in most cases is to approach negotiations as zero-sum games, or they use adversarial approaches in negotiation such as those found from game theory, such as tit-for-tat or the Prisoner’s Dilemma.  Such techniques are successful in avoiding conflict in an unequal or ostensibly competitive environment where the parties’ interests would otherwise dictate cooperation, but most seasoned negotiators will identify the technique pretty quickly, which will undermine trust.  Intimidation and manipulation are surefire recipes for breaking a promising deal, or producing something that satisfies none of the parties.

The difference in perspective between a professional negotiator and an attorney was most effectively summed up by a close personal friend who also happens to be a brilliant attorney.  “The problem,” he said, “is that when you walk out of the room at the end of the negotiation you measure your success by whether all of the parties are happy.  When I walk out of the room I measure my success by all of the parties being unhappy.”

Thus, the last factor in my list is the overriding one and the difference among professions.  As a negotiator I would never recommend that a client, customer, or my management execute a deal that undermined their interests.  An attorney will view the choices as the lesser of all evils. The negotiator is focused on the best of all positives.  A negotiation that is to result in a contract stands on its own merits.  Unlike the law, constructing a contact does not rest on stare decisis.  The process of negotiation is to uncover the facts and pitfalls of the prospective end result, withholding nothing material to the process.  The process of adversarial proceedings is to withhold essential information, especially that which undermines the position of the party being represented.

The other cultural issue that undermines effective negotiations arises in industries where there is a dysfunctional market dynamic, such as monopoly or oligopoly.  Employer-employee negotiations also tend to fall into this area, especially involving a labor union, though the law covering labor relations dictates the opposite behavior.  In these cases the position of the parties is so unequal that a meeting of the minds, absent intimidation and fear, is rarely achieved in reality.  Oftentimes the product of these negotiations will undermine the enterprise or disrupt an entire industry, creating havoc in its wake.  The recent conflict between Amazon and Hachette is a case in point.

The other main barrier, which oftentimes go hand-in-hand with the industry in which one engages is the factor of ego.  It is perfectly fine to drive a good bargain from one’s suppliers, but it is foolish to do so where the deal may drive that supplier (or set of suppliers) out of business.  Of course, that can only be the case if the supplier–and its product–is valued and respected.

It is incumbent on the negotiator to avoid these types of deals, and if one is left with only these terms during the negotiation to completely outline to the client or business the ramifications of signing a bad deal.  The experience of the high bankruptcy rate in certain consumer products industries due the effect of Walmart’s aggressiveness in dictating pricing, oftentimes below the cost of manufacture, is one example.

Ego, finally, is deadly to a successful negotiation.  Scalp-hunting and counting coup may do much for one’s self-esteem but it counts for little in crafting an effective deal.  The same is true for  hurt feelings and taking insult in a transaction that requires direct communication.  Ego blinds individuals to the opportunities within the structure of the negotiation and gets in the way of honest communication, undermining all of the factors for negotiation success.  It is why I recommend that a professional negotiator (who is not an attorney) handle the direct negotiation process, preferably with a similar professional on the other side.

For example, not too long ago I had the opportunity to engage in a lively negotiation where 90% of the terms and conditions were agreed to at a very quick pace.  Two or three areas of disagreement still remained to get the deal done.  In one of those areas the other negotiating team stated their position in very strong terms.  Those terms were a deal breaker–not because the position was unreasonable but because it undermined the economic structure–and the consequent economic justification–for the deal.  I identified this defect and came back to the negotiating team, strongly stating my position that their stance threatened the deal.  I then outlined alternatives that would repair the negotiating position.  The problem is that non-professionals also were present at the negotiation and came away quite alarmed at what appeared to them to be a “hostile” tone between the negotiators.

Nothing could be further from the truth.  The “dance” of negotiation is to clearly and directly state one’s position and to back it up with fact when discussions on the topic resumes.  I had a great deal of confidence and respect for my counterpart and it was apparent that he and his team had a similar amount of confidence and respect for me.  Having gotten preliminaries out of the way allowed us not to have to worry about hurt feelings or bruised egos.  We resolved the issue with some discussion of our respective positions by clearly demonstrating that each was based on a defensible rationale.  We then critiqued the rationales on the table and came up with a cohesive and defensible solution that we knew served the interests of both parties.  It came as an equal shock to the non-professional negotiators in the room that we came to agreement so quickly, with a good deal of mutual admiration expressed at the conclusion of the negotiation.

Our economic engine–in fact civil society itself–depends on honesty, good will, and ethical conduct in negotiation.  I will always remember the day that I was mocked by an attorney for making this assertion, apparently viewing me as a male incarnation of Blanche DuBois.  “How foolish you are,” he stated with absolute pride, ” to think that you can take someone at their word.”  Yes, at their word, prior to the point that the contract is signed, is how most of the world works–at least among those of us who are not thieves or sociopaths.  It is true that law and social pressure must be brought to bear sometimes to enforce this “arcane” practice.  But the alternative is lawlessness and anarchy.

Sunday Contemplation — Finding Wisdom — Siegfried Sassoon

Does It Matter?

Does it matter? -losing your legs?
For people will always be kind,
And you need not show that you mind
When others come in after hunting
To gobble their muffins and eggs.

Does it matter? -losing you sight?
There’s such splendid work for the blind;
And people will always be kind,
As you sit on the terrace remembering
And turning your face to the light.

Do they matter-those dreams in the pit?
You can drink and forget and be glad,
And people won’t say that you’re mad;
For they know that you’ve fought for your country,
And no one will worry a bit.