The Management Challenge

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What Great Teams Do*

Great teams do both, Leadership and Management. Leadership means setting direction, aligning people to that direction, and motivating and inspiring the people on the team to change. While management is about planning and budgeting, operating and staffing, and the controlling and solving of problems that arise steady operations. When these two elements come together, you get "execution;" and great teams exceed expectations in execution.

* Based off the Article “What Leaders Really Do” by John P. Kotter

Image Description: Great teams do both, Leadership and Management. Leadership means setting direction, aligning people to that direction, and motivating and inspiring the people on the team to change. While management is about planning and budgeting, operating and staffing, and the controlling and solving of problems that arise steady operations. When these two elements come together, you get “execution;” and great teams exceed expectations in execution.

Purpose of Project Execution

  • A Project exists to deliver benefits
    • What: builds buyer’s capabilities
    • How: a product or a service
    • Why: return on investment (ROI)
      • Profits per dollar
      • [Benefits-Costs] / Costs

Update on second pass

Understanding the system

  • We must consider our buyer’s system
  • A system could be:
    • A restaurant delivering meals to customers
    • A consumer commuting to work
    • An organization that serves clients
    • A government agency regulating markets
    • A manufacturing plant filling orders
  • Most systems are limited by constraints

Cost World vs. Throughput World

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Throughput management exposes waste and improves profits

Defining Project Return on Investment (ROI)

  • How to evaluate Capability ROI:
    1. Set Objectives – state value in fungible terms (e.g. money or units) for business operations
    2. Baseline Original Performance – Measure initial business process costs and throughputs
    3. Measure Performance with New Capability – evaluate new operating throughputs and costs
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  • “New Cost” includes the Amortized Capability Investment (planning, development, O&M) and resources needed to operate the business with new capability. 
  • This ensures the topline is net profit, or gains (higher throughputs and lower costs) minus the investment. All values are amortized to normalize economic life and rates of return.

The Challenge: Most Projects Fail

  • Most Projects Fail
    • 90% Startups Fail
    • 80% New Products Fail
    • 70% Transformation (Process) Projects Fail
  • In General, at least 50% of ALL projects
    • Miss on Objectives…  or
    • Miss on Budget…..     or
    • Miss on Schedule

Why Most Projects Fail

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Data Source: Project Management Institute,“PMI Pulse of the Profession 2018”

Agile is 2x Safer! And Wins a Lot More…

  • The Standish Group defines the status of projects as the following:
    • Success:
      • On-Time
      • On-Budget
      • Satisfactory Results
    • Challenged
      • Fails one measure
      • Failed
    • Project is cancelled
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Data source: https://vitalitychicago.com/blog/agile-projects-are-more-successful-traditional-projects/?nabe=5763324692922368:0&utm_referrer=https%3A%2F%2Fwww.google.com%2F

The Challenge is Always Greater At Scale

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