How do I handle external pressure?
March 5, 2012
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Project management principles are the same world over. However, the application of those principles vary widely depending on the type of organisation you are in and the type of external pressures you face. Here I use the word external to mean influences outside the project, rather than the organisation. PMBOK and PRINCE2 contend that the Project Manager runs the project on behalf of the governance team or the project board, so the decision on project selection and business case rests with them. Most organisations will use the experience of a Project Manager to determine the business case.
I work for a niche technology company that predominantly provides professional services and software development. Recently we have moved into the product sale market. One constant pressure we face is to limit costs of professional services in order to land a product sale. This is not unique to our company. There is always a judgement call between the appetite for cost the customer has in determining the final price. Regardless of the pressure, the effort required to deliver the outcome the customer is after does not change.
When there is internal pressure to reduce estimates, the Project Manager can negotiate with the sales staff to reduce scope as a trade off. That does not always work, as professional services companies are rarely in the position of setting the agenda. More often than not, they are responding to a demand based on gaps in the customers core staff. Usually everything is a must have. The question at this point becomes not a project management one, but a strategic one for the company. The project may be desirable despite possible overruns in the current project. There may be future projects, or may provide foot in the door to a particular segment of the market or may be a key reference customer. It is the Project Manager’s responsibility to quantify the cost appropriately, so the management can make an informed choice about how much risk they wish to carry. Simply adhering to the wishes of the sales staff is a dangerous game to play.
A second external pressure that constantly challenges project estimates is the pricing of competitors. This is a more difficult proposition to deal with, as the parties are outside the organisation and you will never have the full facts to compare your estimates. The opposition may be desperate and willing to undercut any estimate you provide. Equally, they could be significantly underestimating the risks and deliverables. The key here is to not look at your competitors on a project basis. Look at the pattern over a period of time and see if they are making a success of those projects where you are being undercut. If they are, then challenge your teams to sharpen their estimates. Be mindful though, there will always be cowboys in the market and clients willing to make to do on shoe strings. If that is the case, move on. Choosing to compete at that end of the market will be at the cost of reputation and professional satisfaction.
A third challenge a project manager faces is trying to recommend when a project should be terminated. Usually business cases are made to start a project. It is less common to continually validate the benefits sought in the business case as the project is in flight. Things can get complicated if it is a pet project of someone higher up in the organisation. It is imperative that a Project Manager is aware of what benefits are expected out of the project. That will allow for quantifying accurately if the benefits sought can be achieved based on realities of the project. Nothing is black and white in projects. That is why they are temporary and higher risk than Business As Usual activities. In some cases the organisation may decide risk to reputation is worse than loss in a project.
Projects are inherently risky and pressures are a fact of life. How we deal with the risk and how we quantify it to management is where a good Project Manager stands out. It is the organisation that makes the decision, but it is the Project Manager that provides the analysis to facilitate that decision.