Management in Practice

Beyond the alphabet soup of PRINCE2, MSP, MoP, PMBOK, ITIL, Agile

Building PMO metrics


The Christmas and New Year is always a good time to take some time off the hurly burly of daily grind and reflect on how things are going. Towards the end of the year I did some work on what metrics would help us run our PMO more efficiently. Metrics are always difficult to establish, especially as they only tell a story once you have a baseline to measure against. This is probably a heavy topic for the first post of the year. Apologies for that.

Building-PMO-Metrics

While I see a pressing need for making decisions on evidence, I am also cautious against spurious interpretations of metrics, which can easily happen if taken out of context. You only have to look at statistics driven sports such as baseball or cricket where fans and officials will take diametrically opposing views of players or tactics using different statistics. Numbers are just that. What you interpret from them is what gives them meaning.

The first task was to explore what type of metrics would be useful for our business. I work for a IT professional services firm. It has unique challenges from other types of businesses. I did some research on what other similar organisations are doing. I found this compilation from OpenAir and excellent resource. There are three articles in this and the first one by Thomas Loh is by far the best. This was an excellent start. The key is not to go chasing every metric under the sun, but the ones that you need to measure. That is even more crucial when your PMO is lean and you are in the process of building its maturity. Capturing metrics and analysing them takes effort and time. You cannot afford to be spending either frivolously.

The standard metrics of utilisation, profitability, billing rate etc are quite easy to measure after the effect. We were looking at getting at least one forward looking metric that can help validate our decision making. We decided to invest in our effort in an area that is most challenging for a services business like ours – that is the pull between resource and demand.

Resource-vs-DemandIn services business you either have too much work or too many people. It is crucial to have a good handle of this to maximise profitability. The cycle of winning new business always takes time. If you have left your efforts to bring in new work too late, you will inevitably have periods of low revenue. Unlike products which you can sell at a later time and recoup some revenue, if not all, lost consulting time cannot be archived and sold. That is effectively lost.

To ensure an optimum work pipeline, we can use the charge rate to either stick to our margins, because work is plentiful or use discounting effectively to be more competitive than usual in tough market times. We want to be making a decision on them at the correct times (i.e., not stick to higher margins when market is tough or give away margins when not necessary). We are looking at using Backlog (total value of contracts yet to be executed) as a forward measurement for that.

The aim is to look at recording the backlog value three months out and updating the actuals at the end of the month. As we currently do not have a baseline, I do not expect us to be able to use this effectively in the next year. However, once we have built a picture, we should be able to predict with some confidence what it means to be at a certain point in our backlog and what that is likely to mean in terms of likely actual income.

Because we are looking at it three months out, we’re likely to have enough time to win new business to fill up the pipeline if it is looking less than promising. If pipeline is strong, we know we do not need to compromise on margins. There is likely a follow up on this topic this time next year on how this measurement plays out. Hopefully my challenge is not unique to me and the process is helpful for others to reflect on.

I am keen to understand what predictive measurements you have successfully implemented.

Image credit: communicationstuff.com

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2013 in review


The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog. Thank you to all the readers and commenters. Hoping to make this a more interactive forum in 2014.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 44,000 times in 2013. If it were a concert at Sydney Opera House, it would take about 16 sold-out performances for that many people to see it.

Click here to see the complete report.

Executives Ignore Valuable Employee Actions that They Can’t Measure


Originally posted on HBR Blog Network - Harvard Business Review:

Does better data mean better employee performance and organizational outcomes? That’s the implication of the current emphasis on big data and the use of metrics in HR, but the answer isn’t an easy “yes.”

To see what I mean, consider your local schools. When teachers are evaluated and paid on the basis of students’ test scores, performance on tests typically improves. The moral: Data works. Long live data!

But research also shows that higher test scores don’t necessarily translate to greater student mastery of the material. In other words, teaching methods that are effective in improving test scores may not be the best for increasing students’ knowledge. The moral: Data doesn’t work. Down with data!

Teaching is a great example of the strengths and shortcomings of data-based performance assessments because, in a sense, teachers are both frontline workers (when actively teaching in the classroom) and executives (when they write lesson…

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Can you get the right reaction with the occasional verbal spray?


I was reading an article in the Harvard Business Review regarding the appropriateness of yelling at employees. It was quite an interesting article in which Michael Schrage gives examples as Steve JobsBill GatesSir Alex FergusonVince LombardiArturo Toscanini in various professions as those not averse to a bit of verbal spray. He makes an interesting point that while yelling does not make one a better manager, at the same time it does not necessarily indicate managerial weakness or failure of leadership.

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Scharge seems to have taken quite a hammering if you read some of the comments on the article. However, I am sure he was playing the devils advocate and wrote the piece precisely to get this reaction. Indeed in some cases managers or leaders get away with the occasional hair dryer treatment. Let us have a think about what it is that their employees are letting them get away with and why. I will use some of the gentlemen mentioned in this very article.

The likes of Steve Jobs and Bill Gates built or ran organisations that generated a lot of wealth within its employee ranks. These are also organisations that employ some leading minds and have made a lot of employees rich through stock options. People work in these organisations for various reasons. Some are after the intellectual fulfillment, others for monetary reward, some purely to enhance their resume. Same is true for the likes of Ferguson and Lombardi. Players play for their teams for a mixture of lure of winning trophies, play with other great players, the salary or adulation from the fans.

For every Gates and Jobs there are multiple Kevin Rudd, Mark Pincus. For every Ferguson and Lombardi there are many more Buck Shelfords. The Shelford example is quite striking. He was known as the hardest rugby player. He once played on against France despite an act of foul play resulting in his scrotum being split. Bring back Buck signs are still visible today from fans cherishing his demeanour. Yet, when he took to coaching, he relied on the same “hard man” persona and foul mouth. His teams were unmitigated disasters.

What does that tell us. It is not these leaders’ yelling at their charges that got the results. Instead it was their other attributes of vision, planning, development of individual capabilities and sense of pride in work that were the key contributors for their success. In my view their sometimes tempestuous behaviour actually got in the way to diminish their other qualities. There would be a level of tolerance for everyone. Exceeding those would lead to people abandoning even the most decorated leaders.

Most people are not the special ones mentioned here. If leaders are to take cues from these well known figures, they should instead concentrate on their other qualities. I have found even small things like acknowledging good efforts from individuals and thanking them for those goes a long way than anything else. I struggle to think if yelling would ever give me the same reaction. Everyone is different in how they react to volleys of verbal spray. You have to make sure you get the right reactions from people.

Yelling is a sign of control lost. More credibility you have built over time will dictate how soon your people abandon you as a result. Even if you find it works from time to time, don’t get too fond of it.

Image Credit: Daily Mail

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Why We No Longer Need HR Departments


Originally posted on RobyScar - innovations and visions for SME:

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The time has come for HR (Human Resources) departments to call it a day. HR departments often portray themselves as a valued business partner for management and staff alike.

However, how can anyone take a department seriously that refers to people as ‘resources’?

Nothing matters more to companies than the people who work there. Companies are nothing without the right people! And I am sure that not one, single individual wants to be referred to as a ‘human resource’.

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The first point is that the name is wrong: VERY WRONG.

It signals to everyone that this department manages ‘human resources’ in a top-down fashion, i.e. managing humans in a similar way to other resources such as finance, property or machines. If departments can’t see that this is sending out…

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