The third way running effective projects

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An article outlining how "anyone" can manage complex projects successfully by using the tools and methodologies developed by leading management consultants

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The third way running effective projects

  1. 1. 13-10-2008 Page 1 THE THIRD WAY Using the consultancy approach to avoid the seven deadly sins of internal project teams Version 3.7 October 13 2008 Internal projects don’t always deliver what they promise These days, you can hardly read a business or financial article without encountering the phrase ‘Businesses and organizations are increasingly facing a complex and rapidly changing environment’. In fact, this sentence is so ubiquitous that it is easy to start taking the situation for granted. But changing business scenarios do result in real-world challenges for businesses – challenges that they have to deal with every day, whether they like it or not. Internal project teams often fail to deliver the required results One of the main consequences of our new business environment is the increasing reliance on projects to deliver answers to specific, one-off issues that need to be dealt with outside of day-to-day organizational structures. These projects can be externally focused (developing a new service) or internally focused (improving internal processes). They can be strategic (the development of a new market segment strategy) or operational (streamlining a process in a factory). They can also be short-term (an immediate response to a competitor’s action) or long-term (such as planning and monitoring the roll-out of a new technology). Whatever the case, the projects being carried out by typical organizations are becoming more complex on both external and internal dimensions. External complexity is often related to challenging goals and targets that are open to interpretation and which require buy-in from different stakeholders. Internal complexity arises when distance grows between the project and team members’ day- to-day business, compounded by the level of sophisticated data collection and “out of the box” thinking required to reach optimal results. External consultancy often brings problems of its own An executive faced with a complex issue faces a choice: either they give the responsibility for resolving the issue at hand to an internal project team, or they call in a blue-chip consulting company of their choice. More often than not, management is unhappy with the way earlier critical projects have been carried out and the results that they have delivered. The too common response is therefore to bring in a team of consultants. But this isn’t always the golden solution it promises to be. In addition to large invoices, consultants bring their own set of issues and problems, ranging from insufficient understanding of critical issues to implementation delays due to limited buy-in of the project conclusions. Projects are going to keep on increasing in complexity It is clear that projects are going to become even more complex on both internal and
  2. 2. 13-10-2008 Page 2 external dimensions, meaning that dealing with them in the most effective way possible is going to become even more critical. As the pressure to cut costs continues, there will be less room for the ’easy answer’ of hiring in expensive consultants. One of the most important key questions executives face today, therefore, is how to make internal project teams so effective and efficient that they deliver the required project results on time without the need for expensive external consultants. A ‘third way’ answer is to run internal project teams like consulting teams We believe that there is an answer to this dilemma. We have been helping companies run and manage their internal project teams for years, and our work has clearly demonstrated that all organizations can make their internal project teams more effective and efficient by structurally using the very methods and tools that consultants routinely use in running their projects. By using this “third way” combination of an internal project team run as a consulting team, companies can resolve many of the vexing problems typically associated with internal projects while avoiding the huge fees demanded by leading consulting companies. Knowing your project ‘type’ helps focus time and resources In order to understand the ways in which internal project teams can use consultancy methodology to improve their results, it is important to understand and differentiate between different types of projects. The reason? Each type of project has specific issues and challenges, and understanding the differences allows a better focus of resources, time and energy on the most critical issues. Understanding the four types of projects Our experience has shown that the overall complexity of a project is driven by its external and internal complexity, the level of each which can be determined by four factors as shown in Figure 1. Figure 1: Key complexity drivers
  3. 3. 13-10-2008 Page 3 Every project will vary on all of these factors. However, by scoring each factor and combining the scores for the external and internal factors, projects can be positioned in a project complexity matrix, as shown in Figure 2. Figure 2: The four types of projects Internal Complexity Low High High Q3 Political Projects Q1 Standard Projects Q4 Complex Political Projects Q2 Complex Projects Projects which need to resolve politically sensitive issues The straight-forward “bread and butter” projects of an organization The projects that face complex political issues and need to carry out complex analytics The projects which are difficult to execute due to “intellectual” challenges related to data collection, and analytics Standard Projects are low in external and internal complexity Projects which are low in both external and internal complexity are Standard Projects. Typically, they are the daily projects such as those related to service delivery, which are a standard part of the company’s core processes. These projects can certainly be very large and crucial, and can have issues and challenges of their own, but are well-suited to standard project management tools. Complex Projects are low in external complexity and high in internal complexity Complex Projects are those projects that are difficult to execute due to the intellectual challenges related to data collection and analysis, but where the external environment is fairly straight-forward in terms of goals and acceptance of results. An example of this type of project is the development of a complicated technical solution to a one-off problem. Political Projects are high in external complexity and low in internal complexity Political Projects do not require complicated analytics. The complexity of these projects lies in the political sensitivities of the issues that the project has been asked to solve, and the need for building broad consensus and acceptance for conclusions. An example of such a project is a cost reduction project within a given department. Complex Political Projects are high in both external and internal complexity Complex Political Projects are projects that score high on both complexity dimensions. These are typically projects that are complex to carry out on a stand-alone basis, but which also have a very complicated political environment leading to unclear goals and a complicated communication process. Examples of such projects include the end-to- end transformation of a business process crossing different organizational units and the
  4. 4. 13-10-2008 Page 4 joint development of a new product by two separate companies. Complex Political Projects represent the biggest challenge In our experience, the more that the classification of a project moves upwards and to the right (in other words, towards quadrant 4 of Complex Political Projects), the greater the probability is that the project results will not meet expectations. These projects are almost by definition the most crucial projects to the ongoing success of the organization, so they are often outsourced to consultants, resulting in high costs and implementation issues. The ‘third way’ approach will therefore have the greatest value for projects in this quadrant. The methodology will certainly also work for projects in quadrants 2 and 3 but the clearest lessons can be learned from projects that are complex both on external and internal dimensions. The reasons that Complex Political Projects fail SIDEBAR Lunching with a senior IT executive from a large European utility, we were told a story that highlights most of the reasons that complex projects fail. The company was thinking of moving a number of key operational processes to a country with a different regulatory and operating environment, and needed to get a good understanding of the IT consequences. A team of people from different IT departments was briefed and asked to come back with strong recommendations within eight weeks. Six months later they were still working – they had come across new issues and needed to carry out more interviews before developing their conclusions. When the team finally did deliver their reports, they were focused on the project’s process and did not offer the clear cut answers required by management. No analytical work had been done besides reproducing statements from others, and the reports invariably presented the individual views of project participants which represented the political views of the departments the participants came from, and typically raised more issues than they resolved. What are the issues with internal project teams? The IT story provided in the sidebar provides an extreme but very useful example of the typical problems encountered by management when they use internal teams to carry out complex projects. When we ask executives and senior managers about their typical experiences with internal project teams, we invariably hear variations on these themes:  “Our projects always use more time than agreed”  “The project teams are incapable of delivering useful answers on time”  “The project teams are unable to carry out structured and complex analytics”  “The project teams are unable to communicate the results of the project and get buy-in for their conclusions” When we ask executives why their internal teams fail, the first answer they give is that the internal team members are not smart enough, not experienced enough, and not motivated enough, especially when compared to carefully selected and trained, very intelligent and motivated consultants who populate the top blue-chip consulting companies. Therefore, the typical response of the executives is to call in consultants. When asked about the main value provided by consultants, the answers are the mirror-image of the problems with the internal project teams:  The ability of consultants to provide concrete recommendations supported by strong analytics  The ability of consultants to present findings in a well-structured manner and get buy-in for their conclusions from the key executive stakeholders
  5. 5. 13-10-2008 Page 5  The knowledge that the consultants will deliver within the agreed timeframe. The positive view of the executives on the added value of consultants in Complex Political Projects is balanced by the executives’ experience that the use of consultants can lead to additional problems such as analytical answers that do not take sufficient consideration of the company’s politics, missing buy-in lower in the organization, delays in implementation, and so on. Therefore, they also expressed the strong wish that they could achieve the required results with internal teams. We believe that this wish can be fulfilled. Our experience is that all organizations have smart and motivated people, and most executives do agree with this statement. We also believe that the lack of certain analytical skills can be compensated by a better understanding of the real issues faced by the organization. In other words, we believe that it is possible to make internal project teams more effective and efficient. Based on our many interactions with companies and client teams, both as a consultant and a coach, we believe that we know why these teams are not able to be as effective and efficient as required by their sponsors. This is a crucial first step in the process of improving the performance of internal project teams. The 7 deadly sins of internal project teams Our analysis shows that people are not the basic reason why internal projects fail. Rather, there are other, more important reasons why internal project are less successful than they could be, and we call them the “7 deadly sins of internal projects”:  The project isn’t set up to focus on the right issues  The project sponsor receives limited feedback  The internal teams do not work effectively as teams  There is limited control of the project process  There is limited availability of analytical skills  There is limited ability/willingness to draw conclusions  Projects teams are not trained in how to communicate/get buy-in for their conclusions The project isn’t set up to focus on the right issues Internal projects usually start with a meeting to discuss “a problem”, and a project manager is then asked to go away to solve “the problem”. However, the discussion around “the problem” has invariably been conceptual and broad, and a lot of more or less trivial issues have also been discussed. The project leader then has a choice. They can try to solve “all” the issues, but this lack of focus will almost always result in a failed project. Alternatively, the project leader can choose a sub-set of the issues discussed, but unless they have the skill required to develop a focused understanding of the key issues combined with a feedback process to the sponsor to ensure that the thinking of the sponsor and the project leader are aligned, this approach, too, will fail. The project sponsor receives limited feedback Developing a clear and common understanding of the goals and deliverables of the project is typically the first example of insufficient communication between the sponsor and the project team. Left unaddressed, it will continue throughout the project, with the project team working in relative isolation from the sponsor. Sometimes this is driven by the project team; often it is driven by the “full” agenda (and possible low interest) of the sponsor. The consequences of this lack of feedback are that the team does not have the opportunity to test its hypotheses or get feedback from the sponsor about what they are doing. The internal teams do not work effectively as teams By definition, complex projects require a project team consisting of individuals from various parts of the organization who have no or minimal knowledge of each other. Yet these same people are expected to work under a
  6. 6. 13-10-2008 Page 6 great deal of time pressure to resolve extremely complex key business and political issues. Many employees are not comfortable working in teams to start with, and may not necessarily see any advantage to the teamwork itself or even solving the issues at hand. The consequences are that the project team loses a lot of time trying to develop a structured way of working and an efficient allocation of key tasks. Sometimes they may fail completely, especially if the original project definition is unclear. There is limited control of the project process All projects face issues related to controlling the project process, such as managing scope creep, understanding dependencies between activities, managing to milestones, ensuring that optimal use is made of the scarce resources available to the project, and many more. Numerous books have been written and methodologies developed for dealing with these types of issues. While these methodologies can work well for standard projects, they do not work well for complex political projects, because:  Project methodologies usually assume that the final deliverables are standardized and can be well defined. For Complex Political Projects, the key issue is usually answering a question, but the form and structure of the answer cannot be pre- defined  Project methodologies assume a stable external environment that has little or no impact on the progress and direction of the project. For a Complex Political Project, dealing with the external environment is usually one of the key challenges that the project has to deal with  Project methodologies assume that a stable team used to working together is in place. But as previously stated, the team members asked to solve Complex Political Projects come from different parts of the organization, do not know each other, and often have conflicting political interests These differences make it extremely difficult to manage Complex Political Projects. It is not possible to clearly define the final project outputs, it is difficult to estimate how much time and effort will be required for specific tasks, and finding the right balance between (internal) analytical activities and (external) communication-related activities is complex. When these tasks are carried out by a team with limited experience in running this type of project, it is not surprising that delays and sub- optimal use of time and resources occur. In fact, even greater problems can arise if the project team is given a “project manager” who attempts to use standard project management tools on a Complex Political Project, as this will lead to a methodological strait-jacket, with too much focus on process and insufficient focus on content. A general problem faced by almost all internal projects is scope creep. This problem is even bigger in Complex Political Projects because it is often difficult to define in advance the issues that need to be analyzed. Typically, scope creep takes place when somebody (sometimes the sponsor, sometimes not) asks the project team to look into something that is outside of the original scope of the project. Sometimes this is unavoidable (due to the complex external environment), sometimes it is unclear whether the suggested activity will add value to the goal of the project, and sometimes it is welcomed by the team because it provides an “excuse” for not finishing the project on time. There is limited availability of analytical skills Carrying out Complex Political Projects requires a broad range of analytical skills such as collecting data from third-party sources or face-to-face interviews, developing sophisticated spreadsheet or database models, and recognizing patterns, understanding what they mean, and translating them to the issue at hand. If the project team does not have (or can’t develop) these skills, the project will be limited in its ability to solve issues through analytics, and will tend to rely more on anecdotal evidence for any conclusions they make. There is limited ability/willingness to draw conclusions In every project, the time comes when conclusions need to be made. This is either
  7. 7. 13-10-2008 Page 7 because all of the required analysis has been carried out, or, more often, because the time given to the project is up. However, if the results of the project are uncomfortable to the participants (as in the IT department example in the sidebar or in projects dealing with efficiency improvements), the project team may try to avoid this obligation. They either ask for more time for further analysis, or focus the end results on the process and analytics. As a consequence, the project is not just delayed – it also does not deliver the clear recommendations required by the sponsor. Project teams are not trained to communicate/get buy-in for their conclusions A key element of complex projects is ongoing communication. This is important throughout the project, but towards the end it becomes even more important. Too many times, we have seen project teams make presentations to Steering Committees, Boards, or Management Teams that are too long, boring, full of process related issues, and without recommendations or answers to the issues that the project was supposed to deal with. We have also seen final meetings in which there was no agreement on basic data points, and even violent disagreements on key assumptions or conclusions. The consequences were raising frustrations, further delays, and another “nail in the coffin” of the ability of internal project teams to deliver meaningful results. The solution is to run projects as consultants do In order to improve its ability to successfully carry out Complex Political Projects, an organization needs to think about projects as consultants do and ensure that the organization as a whole is structurally able to carry out this type of projects. Luckily, project- focused changes are independent of structural changes, and can be implemented as stand- alone solutions for ongoing and new projects. Structural changes are easy to apply The structural changes required for increasing the organizations overall ability to carry out complex projects are the same as those required for many other organizational improvements. There are plenty of books and articles on structural changes that describe these changes, and there is no need to go into details about these changes here. In brief, they include fairly standard factors such as hiring the right people with the right skills and attitude for complex project work, developing reward systems that motivate people to participate in project work, offering training in project-related and analytical skills, etc. In addition, there are a number of activities that need to take place in order to facilitate the specific improvements required on a stand- alone project level. Key examples of such activities include developing an overview of internal staff members who have successfully carried out a Complex Political Project, which can be very helpful in the staffing process, and in setting up “Blue Teams”. There should also be easy access to training modules focusing on key analytical skills that are often required for these types of projects. Such training modules include spreadsheet modeling skills, analytical skills, Pyramid Principle Training, etc. The ability to give such training can be developed internally, or can be given by external staff. Project-focused solutions are based on the three phases of a project In addition to these structural changes, there are project-related solutions that are used by all top consultants. These solutions can be implemented on a stand-alone basis to help individual projects minimize the effects of the “7 deadly sins”. The starting point for improving the efficiency and effectiveness of a project is the realization that all projects consist of three distinct phases. These phases are shown in Figure 3.
  8. 8. 13-10-2008 Page 8 Figure 3: Three phases of a project Preparatory Phase Project Phase Finalization Phase •Setting up the project •Agreeing key issues, goals, and deliverables •Developing approach •Putting together team •Aligning and training team •Collecting data •Carrying out interviews •Developing models •Etc •Developing conclusions •Developing final reports •Developing and carrying out communication plan •Ensuring implementation The bad news is that the “7 deadly sins” of internal projects appear across of all these phases. The good news is that in each of these phases, lessons can be learned from the way in which consulting companies carry out similar projects. These lessons will enable internal projects to deal with the “7 deadly sins” and in turn help ensure the overall success of the internal project. Figure 4 shows the three phases and their relationship to the “7 deadly sins”. Figure 4: Where to deal with project issues Phase 1 Phase 2 Phase 3 "7 Deadly Sins" Preperatory Phase Project Phase Finalization Phase Unclear initial definition Limited feedback to project sponsor Ineffective teamwork Limited control of project process Insufficient analytical skills Inability to draw conclusions Inability to communicate The preparatory phase – a carefully controlled beginning The preparatory phase determines the overall success of the project. The activities carried out here will set the scene for all of the following activities. In worst-case scenarios, projects that have had a bad start must be restarted. Consultants are therefore careful to carry out a set of closely coordinated steps during this phase of a project. They:  Agree the project sponsor  Choose the project manager  Develop the project charter  Set up the team  Kick-off the team
  9. 9. 13-10-2008 Page 9 Each of these activities should also be carried out by an internal project team. Doing so will enable the team to deal with four of the “7 deadly sins” right at the start (as shown in Figure 5). Figure 5: Preparatory Phase activities Unclear initial definition Limited feedback to project sponsor Ineffective teamwork Limited control of project process Insufficient analytical skills Inability to draw conclusions Inability to communicate Agree the project sponsor Choose the project manager Develop the project charter Set up the team Kick-off the team "7 Deadly Sins" of Internal Projects Choose a project sponsor who has interest, time and energy For consultants, the project sponsor is usually a given, and will be the executive who comes up with the issue to be solved. This will also often be the case for internal projects, but sometimes it will be the executive who has the responsibility for the area to which the issues pertain. In cases in which the project sponsor is not self-evident, careful thought should be given to who is chosen to perform this function. The executive in question should have interest in the issue, as well as the time and availability required to give sufficient input to the project. The knowledge and the interest of the sponsor should play a key role in ensuring that the project gets a clear and crisp initial definition. In addition, the interest of the sponsor should translate into ongoing time spent with the project team to ensure that the team is heading in the optimal direction, developing the right conclusions, and thinking about the external environment and the required communication process. In addition, the sponsor must help the team deal with organizational issues. If it is decided that the project requires a steering committee, there may be some overlap in responsibilities between the sponsor and the steering committee. Choose a skilled, motivated project manager with an affinity for the key areas The next step is to choose the project manager. This is also a crucial step – this person will have overall responsibility for the project and will be the main “linking-pin” between the project and key executives. In consulting organizations, this is a job function and a career step for consultants with considerable experience in carrying out and leading complex projects. This specific combination of experience and skills may be difficult to find for internal projects. However, you should be able to find a project manager with an affinity and understanding to the key areas to be covered by the project, the right motivation for making the project a success, and the right skills for carrying out the project. The project manager will play a key role in ensuring that the project has a clearly defined background, goals, and deliverables. As is the case with a consultant, the project manager should be made to understand that he will be measured on the success of the project, and will be expected to manage and develop both the team and the overall analytical process itself. Develop a project charter based on an executive/sponsor briefing The first task for the project manager will be to develop the project charter. In a consulting project, the project charter is written in the form of a proposal, has been discussed extensively with the sponsor, and has been formally agreed to by the sponsor (as the contract with the consultant). As previously stated, not having this type of structured and formalized “contract” is one of the key reasons why internal projects fail. A project charter must be
  10. 10. 13-10-2008 Page 10 developed and discussed, based on a briefing with the sponsor and other relevant executives. It should include the following items (typically included in all consulting proposals):  The background to the project, explaining why it is required  The overall goal of the project  The concrete deliverables for the project so that it reaches its goals  A suggested approach for the project  The required team for the project  The required timing for the project Creating this project charter will be time well spent – it will serve the same purposes as a consultant’s proposal, by ensuring that there is a clear definition of the project to be carried out by:  Providing a concise and agreed description of the situation leading to the project  Suggesting concrete goals and deliverables that are reachable by a project in a given time-frame  Providing an agreement on how the project will be carried out and what resources are required  Providing a fixed time frame for how long the project will take. Teams should reflect the issues at hand and contain the right mix of skills The project charter will help you select the best team possible. A consulting company creates a project team by choosing people with the right set of skills, experience, and knowledge of the relevant industry and company, but always faces issues related to the availability of its “best” consultants. An internal project team will also need to be staffed with the “best” people, as this will help resolve many of the issues related to ineffective teams and insufficient analytical skills. Two critical dimensions should be kept in mind when staffing a team. First, the composition of the team must reflect the issues that the project will be dealing with. If the project involves several countries, then the project team should be appropriately international to ensure that country-specific issues are addressed and that buy-in is created internationally for the conclusions. Second, if the issues to be solved involve several organizational units (such as sales and production), this must also be reflected in the choice of team members. Teams also need to have the right mixture of skills. Three broad categories of skills will be required for each project: a) Technical and functional skills directly related to the issues to be solved and/or the approach to be taken within the project b) Analytical skills c) Interpersonal skills It is important to keep in mind that the required skills do not have to be proven through experience. Just as consultants do most of their training “on the job”, skills can and will be developed within the project. For example, if the project involves building a fairly complex model, then the team should include somebody with relevant modeling experience or somebody with some modeling experience who is very interested in increasing their skill and experience in this area. Use a formal kick-off to create shared understanding and build skills A consulting project always starts with a formal kick-off. The goal of this kick-off is to ensure that the whole team understands the background and goals of the project, knows what the deliverables are, and has a clear understanding of the roles to be played by the different team members. A team kick-off is also important for internal projects, and should cover the same issues, but an internal team will not have the same understanding of how teams work, nor the same skills and experience. The internal kick-off should therefore work through these types of issues. Internal project kick-offs typically take one day, and should include the following items:  A “get to know” session  A training session on how to become an effective and successful team  A training session in key (generic) analytical tools
  11. 11. 13-10-2008 Page 11  An explanation of the project (background, goals, and deliverables)  A discussion on the approach and development of a detailed work plan Going through these items will ensure that the team understands what the project is about and what it needs to do to be successful. It will ensure that the group of people allocated to the project becomes a successful team who will work together effectively and efficiently to reach the agreed goals and targets. The project phase – meeting complex challenges with internal teams This phase is normally the longest of the three phases, and is the phase during which most of the work is carried out. The focus of a consultant’s team in this phase is to:  Create a situation in which the team can work together  Monitor milestones and deadlines carefully  Guard against scope creep  Keep the sponsor/steering committee involved  Create a “Blue Team”  Provide ad-hoc training Each of these activities should also be carried out by an internal project team. Doing so will enable the team to deal with four of the “7 deadly sins” (as shown in Figure 6). Figure 6: Project Phase activities Unclear initial definition Limited feedback to project sponsor Ineffective teamwork Limited control of project process Insufficient analytical skills Inability to draw conclusions Inability to communicate Create a good working situation Monitor milestones Guard against scope creep Keep sponsor involved Create a "Blue Team" Provide ad-hoc training "7 Deadly Sins" of Internal Projects Create a situation in which the team can work together The key challenge in this phase for the internal team is to enable the team to work together. This involves ensuring that all team members are able to use the time allocated for the project, and that as much time as possible is spent working together. Consultants often use a ‘trick’ here to achieve this goal – they request a project room for the team and have every team member commit to working out of this room for a certain number of days each week. This close proximity assists in team cohesiveness and ensures that issues are dealt with immediately thereby increasing the overall efficiency and effectiveness of the internal team Monitor milestones and deadlines carefully Monitoring milestones and deadlines is more of a challenge for an internal team than a consulting team. Remember, a key part of building a successful team is enabling the trust that comes from keeping agreements and commitments. While this is “second nature” for consulting teams, internal teams will face pressure from the team member’s own organizations, internal cultures which are not strong in following up on commitments, and so on. The project manager of an internal team must work hard (with help from the sponsor if required) to ensure that deadlines are met. In addition, the project manager will need to coordinate activities across different work streams, and carry out quality assurance tasks related to individual deliverables.
  12. 12. 13-10-2008 Page 12 Guard against scope creep One of the most important roles of the project manager during this phase is to guard against scope creep. All projects, even those carried out by consultants, have this issue. The project manager of a consulting project guards against scope creep by assessing whether requests for additional work fits within the scope of the project and whether it can be done within the agreed resource and time limitations. If this is not the case, then they discuss the issue with the sponsor and agree the solution. The solution can be a) not performing the extra activities, b) performing the extra activities but dropping another activity, or c) performing the extra activity and extending the available time or increasing available resources. The project manager of an internal project should handle this in exactly the same manner, and use the project charter as a basis for discussions on this topic. While this will not “magically” ensure that the project is completed on time, it will, at the very least, enable a structured discussion on priorities. Keep the sponsor/steering committee involved A consultant ensures that the sponsor/steering committee also plays an ongoing role during this phase. The internal project manager should do the same. Sponsors should be available to deal with ad-hoc issues that pop up and need to be “kicked upstairs”. The steering committee should meet regularly to receive progress updates and choose the optimal direction at key decision points. These meetings should also be used to discuss issues related to possible scope creep and new directions which the project might need to take. Create a “blue team” to discuss specific challenges and issues A tool used by some consultants in this phase is a “blue team”. This is a structured meeting where the project team presents its hypotheses and potential solutions to a selected team external to the project. The people selected for the “blue team” should be experts in the key areas relevant to the project. Their role is to give constructive criticism to the ideas and work of the project team, with the goal of improving their work. The project team can also choose to use the “blue team” to discuss specific issues or challenges that they are facing. It should not be difficult for most internal projects to put together a team that can play the same type of role for their project. The “blue team” can consist of people from internal organization and, depending on the sensitivity of the project, external experts such as professors, industry experts, etc. Using a “blue team” will help ensure that the team has covered all the key issues related to the project at hand, and will also provide input on the hypotheses that the team has developed, what it has done to prove or disprove these hypotheses, and suggest alternative activities to move the project forward. Provide ad hoc training for specific tools While consultants ensure that team members have ongoing training in specific analytic tools, a key challenge in this phase of the project for an internal project team is to make sure that the best use is made of key analytical tools. The broad overview of potential tools provided during the kick-off provides a good starting point, but internal teams also need to be trained to use specific tools for key issues that they are facing. This should be done on an ad- hoc basis related to the specific issue. The project leader and the rest of the team play a key role in helping each other define analytic methods within the project, and helping each other carrying out the required analytics. As stated earlier, the ideal team will include people who have experience with specific tools such as spreadsheets. Where this is not possible, training opportunities should be created, even in situations where this creates problems for the project’s timelines. A key enabler for this will be an overview of other people within the company who have the relevant experience or knowledge, and who can provide tips and ideas on an ad-hoc basis. The finalization phase – where internal teams form conclusions and communicate results In this phase most of the work related to developing the project’s conclusions have been carried out (although it pays to keep in
  13. 13. 13-10-2008 Page 13 mind that the borders between the phases are never sharp, and all-nighters involving last- minute analytics before final presentations are fairly common). The main activities carried out by a consulting team in this phase are:  Developing conclusions  Using the Pyramid Principle  Communicating these conclusions in such a way that they are accepted and implemented Each of these activities should also be carried out by an internal project team. Doing so will enable the team to deal with two of the “7 deadly sins” (as shown in Figure 7). Figure 7: Phase 3 activities Unclear initial definition Limited feedback to project sponsor Ineffective teamwork Limited control of project process Insufficient analytical skills Inability to draw conclusions Inability to communicate Developing conclusions Using the Pyramid Principle Communicating the conclusions "7 Deadly Sins" of Internal Projects Make clear to the team that the only acceptable result is a conclusion A consulting team knows very well that it is obligated to come up with firm conclusions and recommendations. Ensuring that an internal team recognizes this responsibility starts during the first phase, where it must be made absolutely clear to the team that the only acceptable result from the project is a firm conclusion. This must be inherent in the stated description of the issue at hand, and must also be hammered into the project team at every possible moment. The finalization phase can therefore be seen as a final push process in an ongoing effort to “force” the team to develop and agree the key conclusions. If the deadlines are tight (and they should be) the team will not be able to use the “more analysis” excuse. Use the Pyramid Principle Consultants use an extremely useful method called the Pyramid Principle to ensure that both the process leading to conclusions and the communication process is efficient. The Pyramid Principle should also be used by internal teams to force them to develop a supportive structure for their conclusions, and at the same time structure the final reports. Learning to use the Pyramid Principle should therefore be one of the pillars of the training program for the internal project teams. Meet with steering committee members before the final presentation Consultants can sometimes be seen as obsessive in their quest to get meetings with all senior members of a steering committee before the final presentation. However, there is a reason for this beyond the development of the consultant’s network, as these meetings ensure that all participants at a final meeting have seen the presentation beforehand and have had the opportunity to ask their specific questions and give their comments. This minimizes the risk of “surprises” at the final presentation, and increases the probability of the Steering Committee agreeing to and accepting the conclusions developed by the team, and thereby the probability of a successful implementation. This approach should therefore also be followed by internal project teams.
  14. 14. 13-10-2008 Page 14 Internal project teams can replace consultants External consultancy is used too often Sometimes projects should be carried out by external consultants. Perhaps the results have to be booked very quickly. Maybe key parts of the analysis involve external benchmarks or other specific analytical skills which consultants have. It may also simply be clear that the required manpower is not available within a given organization. However, our experience shows that there is a large “middle ground” of projects that could be carried out by in-house project teams that are currently outsourced to consultants. Internal consulting groups can bring more problems than they solve Sometimes organizations that want to reduce their dependency on external consultants develop an internal consulting group. These groups are typically staffed by ex-consultants and carry out projects for different parts of the organization. While this model works well in certain types of businesses (Private Equity investors such as KKR have their own consultancy groups who initiate and lead projects at newly acquired businesses), the signals are mixed in many other organizations. Often, the consultants from these groups are treated as “external”, just as if they came from a consulting company, or they are viewed as simply following the political agenda of HQ. This distrust is often made worse by the fact that the ex-consultants often see their function as a stepping-stone to a good job within the organization, and are therefore perceived as having their own political agenda for highlighting problems. Our experience is therefore that while such groups definitely add analytical skills and power to the overall organization, projects carried out by such groups typically have many of the issues (buy- in, delays in implementation, etc.) that external consultants have. Most organizations can learn how to use internal project teams effectively Any reasonably large organization has the competence to ensure that certain basic skills are in place. Using the methods outlined in this article, they can carefully set up, perform, monitor and finalize projects very successfully. Organizations can optimize their internal project teams by learning from the approach consultants’ use, and transforming some of the key “tricks of the trade” into dramatically increased success. Description of author Rune Aresvik has been a consultant since 1990, working in a wide variety of consulting companies ranging from a strategy/M&A boutique to a Big 4 consultancy to a large, international, high added value management consultancy. He has worked at all levels of the consultancy organization, from being a team member, to managing teams, to finally coaching teams as a Partner. He now runs Team Based Consulting, which specializes in helping internal project teams become more successful. Sources / Further reading The Wisdom of Teams: Creating the High-Performance Organization - Jon R. Katzenbach & Douglas K. Smith (Harvard Business School Press) X-teams: How to Build Teams That Lead, Innovate, and Succeed - Deborah Ancona + Henrik Bresman (Harvard Business School Press) The Pyramid Principle (Third Edition) – Barbara Minto (FT-Prentice Hall)

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