More empowerment, less adult supervision and a few other things I learned about project controlling

Inertia is a universal principle which applies to any moving object.  Businesses have it too; they call it pushback or change management, buy-in and other such words.  Thanks to this inertia I learned a few things about how ownership and empowerment are basic to controlling a business and how monitoring can actually destroy value.

It started on a Friday afternoon with an organizational announcement. I got under my responsibility the production development department. Production development is the name given to a team of specialists that figure out process improvements, new technologies and other such things. I had a good amount of development in my area already and I learned by then how these costs are basically a set of projects.  Since this department was used to operating more like overhead, I thought it would be a good time to take it one step further.

I was going to change towards a project-based reporting and controlling. And, as with any change, I did get some pushback. Something pretty much like this: “what is the reason for doing it, I mean we didn’t have it until now and everything worked fine, right?”, “we will spend more time reporting than actually doing the work”, “it’s hard to know in advance how things will be going, these are development activities”, “is this some kind of a way to check if people are actually working? I’m telling you, people here are working much more than they should, not to count the travelling”.

But hey, like my boss tells me:  “as long as you know why you’re doing it and what is the value it brings, just go ahead with it”. And so I started to work on the first part: think more carefully of why this is a good idea and why it is worth the effort. I came up with a few things:

1) Learning: how many resources a project takes, visualize how different competencies are assigned to projects, these things are then documented which in turn contributes to knowledge retention and to developing a learning organization.

2) Decision making: why do you want to get the learning if not to make smarter decisions in the future? Have a fact-based and robust basis for making decisions, assess better how demanding projects will be, have realistic expectations and be able to set fair performance targets.

3) Culture: have a project management thinking as the standard, get used to plan for resources and deliver as expected. Discuss what activities we prioritize and get a clear link to the company strategy and how what we do contributes to the sustainability of the organization.

There you go; a basket of arguments for focusing on project management and the understanding of value in terms of projects. Still, what does that have to do with control? In other words, why would it be me driving the change?

It all started with a question from my boss: “what do YOU need to know in order to feel comfortable?” Well, since I’m thinking about development as a set of projects, I need to know that the projects will stay within budget, will be on schedule and will deliver what they are supposed to deliver. So, how to do that? That would be by monitoring the financials per project and understanding the schedule and delivery status. It will be a bit more difficult in the beginning to grasp the whole thing, but I will learn with time. Right? Hmmm…let’s look at what could go wrong.

The financials show past performance. The value is not in looking at how the costs have evolved up to a point, but in using that understanding to make smart day-to-day decisions to keep project costs under control.

Having a project on schedule at some point does not guarantee it will be on time at the end. Resources may not be available, a new loop may be needed or that “almost done” task suddenly takes two months. The benefit does not come from someone watching over the schedule, but from the project manager thinking ahead and planning to have resources available when needed, maybe reducing scope when things run behind or other corrective actions.

When it comes to the quality of the deliverables, there seems to be an inverse relationship between that and staying within the cost frame. Cheap without quality is not good and making something good quality but which costs a ton of money is also not good, there has to be a balance. Having these in the hands of two persons would make it more like a war rather than a balancing act.

Now, I would answer the same question differently: “To feel comfortable I need to know that project managers are in control of their project from beginning to end”. My comfort feeling is in fact given by the amount of control PMs have and my contribution here is not to monitor the costs, but to make sure project managers have control of their own costs. When I asked the department managers to budget per project and assign it to a PM, I was surprised to see that some of them allocated the entire budget to their team members. Now there was a direct link between the team and the result to be delivered.

There is a big difference between this kind of set-up and the one when there is a controller who looks after the costs and whom you need to “ask” when spending money. What I mean about empowerment over adult supervision is that when someone else tells you how much you should be spending and on what, you won’t have ownership of the results. When I thought I was helping by looking after the costs, I was actually doing a bad thing; I was taking the result ownership from where it was natural to be and moved it somewhere in a grey zone.

After I get some more experience, I will look into whether I can apply earned value management (EVM) and other project management techniques. I’ve also read some opinions out there arguing that agile driven projects are more likely to be under control compared to traditionally run projects. I wonder if I could borrow some of the agile principles into controlling, this is something to keep in mind. Looking forward to seeing how the whole thing will work out and I’ll keep you posted :).

The difference between a business controller and a financial controller

You can't explain everything to everyone