Archive for February, 2008

The Law of the Garbage Truck: A Lesson for Project Workforce Managers

I subscribe to a newsletter from the speaker and consultant Boaz Rauchwerger at BoazPower.com. He sent a story a few weeks ago that has stuck with me. The story is quoted in many places, and was originally written by David J. Pollay. You can read the entire story in Boaz’s newsletter here.

The story is entitle "The Law of the Garbage Truck." Pollay tells the story of how he witnessed a New York cab driver making the best out of somebody else’s bad behavior. Instead of taking on someone else’s garbage, this cab driver smiled and waved at a driver who almost caused an accident. Here’s a key excerpt:

Many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they need a place to dump it. And if you let them, they’ll dump it on you.

When someone wants to dump on you, don’t take it personally. You just smile, wave, wish them well, and move on. You’ll be happy you did. So this was it: The "Law of the Garbage Truck." I started thinking, how often do I let Garbage Trucks run right over me? And how often do I take their garbage and spread it to other people: at work, at home, on the streets? It was that day I said; "I’m not going to do it anymore."

Project workforce managers can learn a lot from the "Law of the Garbage Truck." We see bad behavior, poor performance, and negative attitudes as we manage people and tasks. We have a choice: we can let garbage infect our projects and teams, or we can keep the garbage "in the truck," so to speak, and not dump it on ourselves or others. We can, in effect, smile and wave, and encourage our project workforce to continue to do its best.

How do you avoid garbage trucks? In a previous Blog I described some of the lessons we have learned: http://www.tenrox.com/blogs/talentontarget/index.php/2008/02/patterns-of-success-for-project-workforce-managers/.

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SSPA: Resource for Project Workforce Managers in Service and Support

The article on SandHill.com, entitled "Patterns of Project Management Success," has been picked up for republishing on another web site, Service and Support Professionals Association (SSPA) in their February newsletter.You can access the newsletter and article here.

The SSPA web site is a good resource for project workforce managers who are customer facing and must pay attention to the quality of service they provide. Since nearly all of us serve either external or internal customers, chances are that this description applies to you.

One article of note, which appears in the same issue of the SSPA news as mine, is entitled "Feedback Gathering: A Process, Not an Event." The author, Naomi Karten, describes the frequent problem of organizations who collect customer feedback, but do nothing with the information. Project workforce managers are well advised to use the information they collect before, during, and after their projects to increase the quality of their service with each new project.

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Tough Times Ahead: Opportunities for the Project Workforce?

There is more and more news about the coming economic downturn.  Here are just a couple of examples:

  • In the Workforce Management online magazine’s blogs, Ed Frauenheim writes about "Smarter Belt Tightening." He foresees that companies who have implemented better systems for recruiting and retaining top talent will have more data, and therefore better outcomes, when they have to downsize. in the months ahead.  They will be able to hand-pick top performers instead of making blanket cuts that eliminate the talent they need along with the talent they don’t.
  • On Computerworld’s Management blog, Bruce A. Stewart lists some tips in his post, "Tough times mean tough choices for CIOs." The tough choices include cutting waste, buying only what you need, and smarter project prioritization; he states:

Don’t do something just to appease your peers. IT executives often say that IT is the only group that sees the whole enterprise. But how many CIOs actually turn down their peers’ requests for new projects by saying, "That’s not in the interests of the corporation at this time"? Your actions should show that you really do see the whole company, and the big picture, just as your CEO would.

Smart workers in this economy will manage their own talent entrepreneurially, as I described in Seven Survival Skills for the Flat World. When layoffs come, the most valuable workers, theoretically, will be retained because the decision makers will have better information at their fingertips. However, when project workers are laid off, they will be smart to approach the job market with the same entrepreneurial spirit.  Look for good projects where you can build your skills–don’t merely look for job security, because it is becoming a thing of the past in the flat world.

Smart workers in the "project market" (as opposed to the "job market") should also be advised to look for agile companies who use Project Workforce Management. Look for companies who follow the market and then seek talent to fill market needs–not companies who look for work for their current, probably stagnant, workforce to keep them and the company "busy".

Smart companies in this economy will benefit from Project Workforce Management now more than ever: to streamline the costs of doing business, keep projects on course, and manage effective workflows, just to name a few. Moreover, as Bruce A. Stewart alludes to project prioritization and selection in the excerpt above, smart companies will do the right projects. This, too, requires them to look to the markets and be ready for change.

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Workforce Planning Webinar, Tuesday, February 19

Because Workforce Planning is so easily overlooked in today’s organizations, I hope many of our colleagues will attend the Tenrox webinar this coming Tuesday. Please register on the Tenrox web site.

The title of this session is "Workforce Planning – A Proactive Approach to Managing Company Growth." As we discuss in detail in Rise of the Project Workforce (see Chapter 9 on Workforce Planning), staffing projects with appropriately qualified people is still a challenge for many companies. While many project managers speak of a Talent Crisis, they still have trouble making best use of the talent that they do have, because they do not have the best information at their fingertips as to their workers’ latest skills, interests, and aspirations. It is too easy to use and re-use the same team of familiar and available people.

Project Workforce Management gives project managers and staffers the ability to look outside the "usual suspects," both inside and outside the organization, so that projects benefit from the right sets of skills and fresh combinations of talent.

Please join us on this webinar to learn more about how to make projects more successful and manage growth. Register here on Tenrox.com.

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Rise of the Project Workforce, Chapter 5: Complying with Labor Laws and Accounting Regulations

For more details about how Project Workforce Management eases the burdens of compliance, see Rise of the Project Workforce.

Despite the widespread availability of information in the flat world–which minimizes barriers and increases the velocity of business—the increasing burden of government compliance threatens to slow things down. Heavy requirements for accounting and documentation, spanning multiple departments, are too extensive to be met with spreadsheets and email. Point solutions (such as separate software tools for HR, finance, project management, and IT) increase the operational load, especially when they require custom integration or data warehousing. High-performing companies demand true enterprise-wide systems, and this is the promise of Project Workforce Management.

Here, we illustrate just a few of the compliance issues (in addition to SOX) that North American companies face, and the ways that Project Workforce Management helps not only to lighten the burden, but also increase agility and performance.

U.S. Federal and Local Labor Laws

Laws such as the Fair Labor Standard Act (FLSA), which establishes minimum wages and overtime pay, and the Family Medical Leave Act (FMLA), which establishes unpaid leave for families, are just two of the many labor laws that require companies to keep strict records and accounts. In addition to these, state/province and local governments may have additional laws, and companies have their own policies and rules.

Companies must track which people are eligible for what pay, leave, and hours, and which of the tasks they perform, in various situations, applies to various regulations. When workers of varying eligibility participate in different types of work, the compliance issues can get too complex for spreadsheets or even many time-tracking programs.

Project Workforce Management automates business rules, and implements differentiated time tracking so that time entries are attributed to the proper tasks, locations, rates, overtime, and leave regulations. It greatly reduces the amount of time required to calculate compensation, reduces disputes, and even saves companies from legal fees and fines.

GAAP and Software Investments

In the U.S., Generally Accepted Accounting Principles (GAAP) Statement of Position (SOP) 98-1 standardizes how companies report revenue earned, expense, capitalize, depreciate, and amortize their software investments. Software investments fall into four distinct categories, each subject to different accounting guidelines.

Because not all software development activities can be accounted for in the same way, and because it is common for workers to spend time on different projects, SOP 98-1 requires companies to carefully differentiate the time their workers spend on developing software for each of these categories of use.

Project Workforce Management provides the differentiated time capabilities required to comply with SOP 98-1. Organizations can track all development costs by project, stage, activity, and person, and then capitalize and expense these items appropriately, without the additional complexity and overhead of siloed, non-automated data.

Government and Defense Contracts

The Defense Contract Audit Agency (DCAA) reviews contracts between vendors and the U.S. Department of Defense, to ensure that costs are legitimate and allowable. Contractors must not only submit routine reports, but are also subject to audits. They must keep stringent timekeeping records, and accurate accounting records showing direct and indirect costs. Failure to comply has significant penalties and risks.

Project Workforce Management differentiates time and cost data appropriately, deploys time and expense recordkeeping to employees, and assures adherence to federal standards. Because data collection and reporting are automated, it dramatically decreases the burden of on-demand audits.

Scientific Research and Exploratory Development

Canadian-controlled companies can earn significant investment tax credits for their research and development efforts under the Scientific Research and Exploratory Development (SR&ED) program. Allowable expenses include salaries and wages, materials, contracts performed on the company’s behalf, lease costs and other overhead—as long as these costs can be directly related to qualified research and development activities.

Eligible work must be planned and documented as such; personnel working on these activities must be properly qualified; all time and expenses must be reported accurately; and all project activities must be documented. Without proper records and documents, qualifying for SR&ED can result in burdensome audits.

Project Workforce Management simplifies compliance with SR&ED by providing processes for project initiation and definition; managing resource allocation and skill matching; tracking time and expenses accurately; providing workflows for scope change and risk management; and collecting and consolidating data for reports.

Conclusion: Fringe Benefits of Compliance

Project Workforce Management offers the automation and integration of time and expense tracking, cost and revenue accounting, workforce planning, project management, and analytics that makes compliance with these and other laws and regulations much less cumbersome. Moreover, as laws change, Project Workforce Management provides the flexibility to adapt to change quickly.

Like the gold miner who gave up drilling and stopped three feet away from a rich vein that would be discovered years later, companies that work hard to comply with government regulations might be “stopping three feet from gold” in their efforts. Forward-thinking organizations don’t stop at minimum compliance. They also drill for the agility and responsiveness that will lead them to success in the flat world.

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Patterns of Success for Project Workforce Managers

A new article I contributed on SandHill.com, entitled "Patterns of Project Management Success," allowed me to answer the questions, based on our experiences here at Tenrox: which projects were successful? Which ones disappointed or failed, and why? We are fortunate to be able to recognize sets of behaviors that forecast success or failure.

Success begins with consistency. Characteristics for success include small teams combined with a "roll up your sleeves" work ethic where work gets done, not delegated until it gets lost. Success also depends on reliable, simple communication, starting with the Plain Old Telephone System (POTS) that we have discussed here before.

Failure begins with a lack of basic project management skills. Characteristics of failure include poorly communicated requirements and poorly managed expectations. In my book The Rise of the Project Workforce, entire chapters are dedicated to business case development, implementation challenges and user adoption. These are critical methods for avoiding common mistakes that lead to project failure.

More characteristics of success and failure in project workforce management are described in detail in the article on SandHill.com.

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Rise of the Project Workforce, Chapter 4: Why Project Managers Need to Know about Sarbanes-Oxley

For more details about project management and Sarbanes-Oxley, see Rise of the Project Workforce.

Now more than ever, project managers and the project management office (PMO) have to gain a better understanding of the roles they play in compliance. Sarbanes-Oxley (SOX) has made corporate governance mandatory for public companies, and project managers generate the raw data that make compliance possible. Forecasts of costs and revenue, measures of financial risk, real-time data of project status are a few examples.

SOX requires CEOs and CFOs to personally sign-off on quarterly financial reports. It also requires companies to have internal controls to flag irregularities and prevent errors; rapid disclosure of material changes to the company’s operations; and strict audit records and a comprehensive document retention policy which extends all the way down to emails and memos.

Without formal processes and systematic data capture, companies risk inaccurate measures, and too much subjectivity in the financial analyses that CEOs and CFOs must certify. Although formalizing these processes is possible without automation, the right software can reduce costs, improve project delivery, enhance the confidence of all stakeholders, and be a driver for positive change.

By automating their business processes with workflow software that is linked to the company’s financial applications, Project Workforce Management software enables the organization to enforce key processes, validate data at the point of entry, audit transactions, design reports and dashboards, and track all approvals and change requests.

Project Workforce Management facilitates compliance of specific sections of SOX in the following ways:

  • Section 302 requires CEO and CFO to sign-off on the accuracy, timeliness, and appropriate internal controls for quarterly financial reports. Project Workforce Management provides audited and effective controls that allow officers to sign with confidence.
  • Section 404 relates to the ability of internal controls to intercept and detect any irregular, questionable, or fraudulent activity. Project Workforce Management provides centralized and institutionalized processes for projects, workforce management, financial approvals, and change management, so that data is verifiable.
  • Section 409 requires the rapid disclosure of any material changes in the company’s projects and operations, such as a late release of a new product. Project Workforce Management provides detailed work process and project status information to analyze the company’s business in real time.
  • Section 802 requires the company to establish strict audit records and a comprehensive document retention policy which extends to emails, project plans, timesheets, memos, minutes, reports, proposals, and sign-offs. Project Workforce Management records all operational documents and transactions.
  • Section 906 outlines the penalties to officers, including fines and imprisonment, for certifying non-compliant reports under SOX. Project Workforce Management detects questionable transactions and protects assets before problems arise.

Officers cannot and should depend on error-prone, manual systems that can lead to false reports and even serious legal consequences, as demonstrated by Enron, WorldCom, and Arthur Andersen in recent years.

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Scarcity of PMs: Good News for Ambitious Project Workforce Managers

A recent article in PM Network, the PMI’s monthly magazine ("The Great Talent Shortage," January 2008, by Tom Sullivan), in addition to a recent post on the PM Hut blog ("Good Project Managers are hard to find," January 29, by Harley Lovegrove) remind us of what we have been hearing for a while: the talent crisis is coming. These articles, specifically point to a shortage of qualified project managers.

Some people see a growing popularity and widespread acceptance of project managers, as evidenced by the large number of PMP (Project Management Professional) training programs. While this might be an overall trend, I still see within many companies a resistance to making project management an enterprise-wide priority (which I have written about in Rise of the Project Workforce).

In the PM Hut blog post, Harley Lovegrove states that companies in Brussels (where he is located) are having trouble finding qualified PMs. Then he writes:

However I am concerned that although we are experiencing a shortage of high quality PM’s at the moment, the rates are only OK. There is no such thing as a hungry PM … but they are not going to get rich either, especially if the market takes a downturn.

The PM Network article describes scenarios in which PMs can get hefty salaries–if they have good experience, and industry expertise in addition to PM savvy. The article explains that some of the feeling of "shortage" may be due to companies’ unwillingness or inability to train from within–and a general impatience to find the right person, right now.

So, for the relatively young PM generalist, the rates might only be "OK," even in the face of a "shortage" of very highly qualified and specialized project managers.

I urge young project managers to think entrepreneurially, as I described in Seven Survival Skills for the Flat World.  Recent news and observations still bear out the need for PMs to develop their skills and specializations, learn cutting edge tools, and always improve their own marketability.

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Rise of the Project Workforce, Chapter 3: Project Governance

For more details about project governance, see Rise of the Project Workforce.

Project and workforce governance roadmaps should be designed to address the potential threats associated with:

  • Cost and Revenue Accounting
  • Portfolio and Project Processes
  • Corporate Governance

This chapter identifies enterprise-wide threats and uses a symptom – cause – solution format to highlight steps executives need to take to effectively manage risk and reduce the likelihood that any of these threats may damage their business.

Cost Accounting

Related to cost accounting, we identify project governance issues in the areas of budgeting, chargebacks, timesheet management, travel and entertainment expense management, revenue recognition, and capitalizing costs.

The symptoms of cost accounting governance issues include: projects that are over budget, late, or failing; inability of project managers to plan projects effectively, or track costs accurately so that internal departments can be charged or external departments can be billed; inability of managers and executives to get timely, actionable reports; the inability of finance to determine recognized revenue and costs that should be capitalized and not expensed.

The threats of not dealing with these issues include not only failed projects, but the general inability to execute on corporate strategy, because important financial data is not available to project managers and executives. Moreover, under these conditions the finance department will have difficulty performing in nearly every way; lack of accurate data can easily lead to erroneous forecasts, inefficient invoicing, late payrolls, tax problems, and incorrect—and illegal—financial reports.

The causes of these problems are generally the inability to collect and manage accurate data from the many areas of the company. In some cases, the corporate culture does not support basic data gathering functions such as the tracking of time and expenses, measurable project status, and billable project milestones. Usually, the company lacks the processes and tools to collect this data, or has various processes and tools in separate departments.

The solutions to the problems, in all cases, require company leadership to implement top-down processes that allow accurate data collection and management, and real-time reporting.

Portfolio and Project Processes

Here we describe the processes of managing a company’s portfolio of projects, under the categories of: templates, methodologies, and best practices; status, health, and milestones; initiation and approval; risk management; issue management; change control; and pipeline analysis.

The symptoms of problems include: frequent change in project status, and surprising delays and budget overruns; Competition between projects and departments for project resources; inability to manage project risks and changes; lack of responsiveness to issues that arise.

The threats of these problems are: management lacks an enterprise-wide view of all of the company’s current and proposed projects, and therefore has no ability to allocate and manage resources or prioritize the company’s activities strategically.

The cause of these problems is typically that project management is not recognized as a necessary and critical business function. Therefore, no formal processes or tools are in place to approve new projects, manage resources and work-in-progress, or control risks, issues, and changes.

The solutions begin with establishing a central project management office (PMO) to define and enforce project management standards and best practices, and provide the right tools to promote enterprise-wide project management. These standards include project initiation methodologies, processes for tracking project status and milestones, policies for proposing and approving projects, workflows for risk management, and policies for managing issues and proposed changes.

Corporate Governance

This section addresses Sarbanes-Oxley sections 404 and 409 (internal controls and rapid reporting), and 802 (destruction and falsification of records), in addition to labor laws, accounting regulations, and risk management standards for financial institutions.

The symptoms of problems largely center around audits: the company has difficulty providing all the information demanded by an audit; too much time is spent preparing for audits and avoiding legal liability instead of running the business.

The overall threat of lack of compliance is to fail an audit or face legal charges.

A frequent cause of governance issues is manual record-keeping, based on separate spreadsheets, documents, emails, memos, reports, invoices, and so forth. Important information is easily lost or destroyed.

The solution requires companies to centralize and automate its record-keeping, and implement workflows that establish approvals and accountability.

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