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					Problem Solving to Close a
Project Gap– Defining and
Initiating Action
Erik Vogel
Sr. Program Manager, Hewlett Packard

erik.vogel@hp.com
801.453.0611
PMs often find it difficult to close performance gaps, particularly when cross-
functional organizational processes are not designed to do so.




TYPICAL PROJECT SITUATION


Gap is substantial and often                                   . . . and in-place organizational
cross-functional in nature . . .                               processes are insufficient

                                                                         This year’s business
                                                                       case is dependent on us
                                                                        completing this project


                                                                                             We’ve never
                                                                  We need
                                                                                             achieved that
                                                                impact today
                                                                                             level before!


        Actual Plan     Gap
                                                                                             How can I do
                                                                Where’s the                  this on top of
                                                                silver bullet?                my current
                                                                                                  job?



                                                                            Our current
                                                                           efforts are not
                                                                           having enough
                                                                               impact!

                                                                                                              1
Closing the project performance gaps typically involves an iterative process
where waves of initiatives (prioritized by impact and ease of execution) are
undertaken.




ITERATIVE PROCESS USES WAVES OF INITIATIVES TO CLOSE GAP
                                                                                        Time to year end

                                                                                          212 days




       Getting                                 Closing in                           Achieving
       started                                 on the gap                            the plan




Quickly launch no-regret                  Launch actions to                    Launch additional
actions to get moving                     narrow the gap                       waves of actions to
• High impact                                                                  close gap
• Easy to execute




                                                                                                           2
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                       2. Generate list of potential
 Define the problem                                                                       opportunities                   Rollout successful initiatives

                                         Forecast Plan            Gap




                           7. Launch and roll out
                              initiatives                                                                 3. Focus on higher-impact/
                                                                                                             easier-to-execute
                                    Next
                                                                                                             opportunities
                           KSFs steps Responsible
                                                                                                          Impact


                                                                                                                   Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s      Forecasted   Impact of
                                                                                                     4. Build a fact base and size
                                discussion   gap          time                                          selected opportunities
                                Approach to No-regret     Potential
                                closing gap initiatives   impact                                                         Potential
                                Save desk    KSFs         Next steps                                  Rationale          impact
                                summary

                                                                        5. Develop KSFs with
                                                                           aggressive work plans
                                                                               Description of
                                                                        KSF    desired state




                                                                                                                                                           3
                         It is important to move quickly through each of the steps to allow time to
                         execute and iterate. The learning is in the doing.




PROBLEM SOLVING TIMING                                                                                                                                               ILLUSTRATIVE



Speed is of the essence . . .                                                                                                             . . . to allow time to iterate

Step                  Iterate

0              1                2                3               4           5            6               7
                                                                      Build a fact
                                    Generate          Focus on
                                                                      base and       Develop
                                    list of           higher                                        Tell story      Launch
Define the     Establish                                              size           KSFs with
                                    potential         impact/easier                                 to build        initiatives
problem        the goal                                               selected       aggressive
                                    oppor-            to execute                                    support         and roll out
                                                                      opportun-      work plans
                                    tunities          opportunities
                                                                      ities

Example of required time frame
Calendar weeks*
                                                                                                                                   9-20

               1                    1-2               1               2-3            1              1-2             2-10

Common timing
pitfalls

               Not enough           Too much          Not enough      No time        No time        Not enough      Too much
               time spent           time spent in     time spent      dedicated to   dedicated to   time spent to   time spent
               selecting            brainstorming     prioritizing    researching    researching    obtain buy-in   waiting for
               measurable           phase without     leading to      key facts      key facts or   from            roadblocks to
               metrics,             quickly moving    suboptimal      validating/    validating/    stakeholders    be removed               Gap     No          Close in Achieve
               leading to           to prioritizing   selection of    disproving     disproving                     rather than                      regrets on the          the plan
               inability to         phase             initiatives     assumptions    assumptions                    pushing                          initiatives gap         initiatives
               measure                                                                                              roadblocks up                                initiatives
               success/                                                                                             to senior
               failure of                                                                                           management
               initiative                                                                                           to resolve




* Certain steps may need to be implemented in parallel
                                                                                                                                                                                           4
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                       2. Generate list of potential
 Define the problem                                                                       opportunities                   Rollout successful initiatives

                                         Forecast Plan            Gap




                           7. Launch and roll out
                              initiatives                                                                 3. Focus on higher-impact/
                                                                                                             easier-to-execute
                                    Next
                                                                                                             opportunities
                           KSFs steps Responsible
                                                                                                          Impact


                                                                                                                   Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s      Forecasted   Impact of
                                                                                                     4. Build a fact base and size
                                discussion   gap          time                                          selected opportunities
                                Approach to No-regret     Potential
                                closing gap initiatives   impact                                                         Potential
                                Save desk    KSFs         Next steps                                  Rationale          impact
                                summary

                                                                        5. Develop KSFs with
                                                                           aggressive work plans
                                                                               Description of
                                                                        KSF    desired state




                                                                                                                                                           5
STEP 1 – ESTABLISH THE GOAL


                                      Clearly define goal with success metrics and
                                      timing

                                      Benchmark goal vs. industry (best practice vs.
                                      laggard)
                    Define the goal   Evaluate distance to goal and impact to the
                                      business

                                      Develop metrics for ongoing timely
                                      measurements
        Establish                     Develop subgoals for organizational functions
        the goal                      and obtain buy-in from key stakeholders




                                      Continually validate goal with organizational/
                    Ensure goal is    business unit objectives
                    appropriate
                    going forward     Identify potential improvements to goal to
                                      better meet organizational objectives (e.g.
                                      targeting high value customers versus all
                                      customers)

                                                                                       6
                         A gap is generated when the forecasted performance will not meet the target.




FORECASTED GAP*                                                                                                                                     ILLUSTRATIVE




Current run rate . . .                                                                                   . . . generates a gap to target


16.0
                                                                               Forecast at
14.0                                                                           current run
                                                                               rate
12.0

10.0
                                                                               Target
 8.0                                  Gap

 6.0

 4.0

 2.0

 0.0                                                                                                          Plan                   Total fore-   Gap to plan
                                                                   Nov
                               May
       Jan




                                     Jun




                                                                                                                                     cast
                                           Jul




                                                             Oct
                   Mar
                         Apr




                                                                         Dec
             Feb




                                                 Aug
                                                       Sep




* In this example, gap results from the forecast being higher than the plan – e.g., expenses, customers lost, staff turnover,sales
                                                                                                                                                                   7
In typical gap situations, if action is not taken immediately, significant catch-up is
later required.




IMPACT OF TIME ON CLOSING GAP                                                                      ILLUSTRATIVE



The longer the gap goes unaddressed . . .                       . . . the greater the challenge

Actual quarterly gap                                            Cumulative gap


Q1
                                                                                           Gap already too
                                                                                           considerable to be
                                                                                           closed
Q2




Q3                                    Action is
                                      taken



Q4




                                                                                                                  8
STEP 1: ESTABLISH THE GOAL – COMMON PITFALLS

                                                                               Common pitfalls

                              Clearly define goal with success metrics         Too many success metrics chosen, leading to
                                                                               confusion

                              Benchmark goal vs. industry (best practice       Goals selected are either too aggressive or
                              vs. laggard)                                     too conservative

            Define the goal   Evaluate distance to goal (forecasted gap)       Latest data/forecast not used to evaluate
                                                                               distance to goal

                              Develop metrics for ongoing timely               Tracking of ongoing metrics difficult; requires
                              measurements                                     too much time

Establish                      Develop subgoals for organizational             Measurable subgoals not linked to
the goal                       functions and obtain buy-in from key            accountability for individuals or organizations;
                               stakeholders                                    buy-in not gained



                              Continually validate goal with organizational/   Over time, goal becomes misaligned with
            Ensure goal is    business unit objectives                         organizational objectives
            appropriate
            going forward     Identify potential improvements to goal to       Organizational inertia prevents improvement
                              better meet organizational objectives (e.g.      of goals
                              targeting high value customers versus all
                              customers)
                                                                                                                                  9
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                       2. Generate list of potential
 Define the problem                                                                       opportunities                   Rollout successful initiatives

                                         Forecast Plan            Gap




                           7. Launch and roll out
                              initiatives                                                                 3. Focus on higher-impact/
                                                                                                             easier-to-execute
                                    Next
                                                                                                             opportunities
                           KSFs steps Responsible
                                                                                                          Impact


                                                                                                                   Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s      Forecasted   Impact of
                                                                                                     4. Build a fact base and size
                                discussion   gap          time                                          selected opportunities
                                Approach to No-regret     Potential
                                closing gap initiatives   impact                                                         Potential
                                Save desk    KSFs         Next steps                                  Rationale          impact
                                summary

                                                                        5. Develop KSFs with
                                                                           aggressive work plans
                                                                               Description of
                                                                        KSF    desired state




                                                                                                                                                           10
STEP 2 – GENERATE LIST OF POTENTIAL OPPORTUNITIES



                Perform quick inventory   Review current scope
                of current initiatives    Brainstorm potential
                                          improvements/increases in scope                              Reps
                                                                                          Internal     Operations
                                          Review unimplemented/
                                          stalled initiatives                                          Other
Generate list
of potential                                                           Interviews                      Market research
opportunities                                                                             External     Focus groups
                                          Generate new                                                 Individual customers
                                                                       Brainstorm
                                          ideas/initiatives
                                                                                          Letters
                Generate/                                              Customer           Web sites
                brainstorm additional                                  feedback           Other
                opportunities
                                                                       Client past experience
                                          Review best/other practice
                                                                       Rest of industry
                                                                       Other associated industries

                                          Perform analytic/data        Scan data landscape
                                          mining-based idea
                                                                       Perform hypotheses-driven analysis
                                          generation
                                                                       Perform exploratory analysis using
                                                                       sophisticated tools (e.g., CHAID)
                                                                                                                              11
One method for developing a list of opportunities is to create a tree, striving to be mutually
exclusive and collectively exhaustive (MECE).




EXAMPLE OF TREE TO ASSIST IN IDEA GENERATION

                                                                                   Potential opportunity

                                                Improve qualification                  ...
                    Improve selling
                                               Increase focus of value
                    capabilities
                                               proposition                             ...
                                                ...
                                              Offer contract incentives

                    Expand offers to
                                                Offer multiservice bundles
                    new customers
                                                ...
Potential
opportunities                                 Create loyalty rewards program
                    Increase customer
                    loyalty                     Create upgrade offers

                                                ...


                                                ...
                    Other
                                                ...




                                                                                                           12
Team brainstorming sessions are useful at this stage, but they require
ground rules.




BRAINSTORMING GROUND RULES                                                                      EXAMPLE




            Today’s discussion is about this . . .      Not this . . .
              Thinking out of the box                     BCG (bashing, complaining, and
                                                          groaning)
              Generating the maximum number of
              ideas in the shortest time possible         Eliminating/discarding ideas before
                                                          we have sized them
              Building on each other’s ideas for
              maximum impact                              Spending too much time on a limited
                                                          set of ideas (getting derailed)
              Applying a filter of pragmatism/reality
                                                          Adopting a negative approach (e.g.,
              Building team consensus on high             “that must be impossible”)
              impact/easy to execute initiatives




                                                                                                          13
Brainstorming becomes most effective when the team builds consensus around
impact potential and ease of execution for each opportunity.




BRAINSTORMING BEST PRACTICES
                                                                                              Critical for
                                                                                              success




 During the session                          After the session




   1. _____             1. High
                           easy
   2. _____             2. Low                                         e-mail
   3. _____                difficult
                        3. Medium
                           medium

 Record all            Vote on ideas          Record all              Follow up          Do it again
 ideas on flip         at the end of          ideas from flip         on all ideas,
 charts                the session to         charts                  and get
                       determine              for                     feedback from
                       potential              consolidation           all participants
                       impact/ease            and sorting
                       of execution




                                                                                                             14
It is therefore important to consolidate top opportunities into a sorted list.




SORTED LIST OF POTENTIAL OPPORTUNITIES                                                              ILLUSTRATIVE




                    Potential          Ease of        Required analysis/
Priority hypothesis impact             execution      activities                 Facts needed   Source
1.                      High           Easy

2.                      Medium         Easy

3.                      High           Medium

4.                      Medium         Medium

5.                      High           Difficult

6.                      Medium         Difficult




                                                                                                                   15
STEP 2 – GENERATE LIST OF POTENTIAL OPPORTUNITIES – COMMON PITFALLS

                                                                                Common pitfalls
                                           Review current scope                 • Current initiatives not re-evaluated




                Perform quick inventory    Brainstorm potential improvements/   • Insufficient “thinking” time devoted to
                of current initiatives     increases in scope                     improving current initiatives
Generate list
of potential
opportunities                              Review unimplemented/                • Unimplemented/stalled initiatives
                                           stalled initiatives                    abandoned after departure of champion
                                                                                • Good ideas killed by initial obstacles


                                           Generate new ideas/initiatives       • Ideas ignored that require significant
                                                                                  changes, or are too hard


                Generate/brainstorm
                                           Review best/other practice           • Competitors’ practices not reviewed;
                additional opportunities
                                                                                  other industry best practices not
                                                                                  reviewed

                                           Perform analytic/data mining-based   • Key facts accidentally ignored
                                           idea generation                      • Hypothesis developed too soon
                                                                                                                            16
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                       2. Generate list of potential
 Define the problem                                                                       opportunities                   Rollout successful initiatives

                                         Forecast Plan            Gap




                           7. Launch and roll out
                              initiatives                                                                 3. Focus on higher-impact/
                                                                                                             easier-to-execute
                                    Next
                                                                                                             opportunities
                           KSFs steps Responsible
                                                                                                          Impact


                                                                                                                   Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s      Forecasted   Impact of
                                                                                                     4. Build a fact base and size
                                discussion   gap          time                                          selected opportunities
                                Approach to No-regret     Potential
                                closing gap initiatives   impact                                                         Potential
                                Save desk    KSFs         Next steps                                  Rationale          impact
                                summary

                                                                        5. Develop KSFs with
                                                                           aggressive work plans
                                                                               Description of
                                                                        KSF    desired state




                                                                                                                                                           17
Initiatives can be classified by their potential impact and their ease of execution.




STEP 3 – FOCUS ON HIGHER-IMPACT/EASIER-TO-EXECUTE OPPORTUNITIES                                    ILLUSTRATIVE

                                                                                                   Opportunity
                                                                                                   Highest priority
                                                                                                   opportunities
     High
                                              A

                                                      B
                                                                                 • Quickly identify no-regret
                                                                                   initiatives for immediate
                               C                                                   action and more detailed
                                                             H
                                              I                                    analysis
IMPACT                                                                           • Beware of common pitfalls
                                                                                   – Too wedded to ideas
                          D                       E                                – Too quick to say no –
                                                                                     workarounds could work
                                                                                   – Not resizing when new
                                                                                     information is received
                                             F
                          G



     Low

            Difficult                                            Easy
                              EASE OF EXECUTION

                                                                                                                      18
It can be tremendously helpful to break potential opportunities into no-regrets and
more-involved initiatives.




TYPICAL WAVES OF ACTIVITIES


                                                                 Characteristics

                                  Execute low-risk/no-           • Positive impact, quickly
                                  regret initiatives             • Executable through focused initiatives
                                                                 • Low risk



How can we achieve
the goal




                                  Develop and execute            • Based on segments of high-value
                                  more involved initiatives        customers
                                                                 • Focus on managing through customer
                                                                   milestones




                                                                                                            19
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                       2. Generate list of potential
 Define the problem                                                                       opportunities                   Rollout successful initiatives

                                         Forecast Plan            Gap




                           7. Launch and roll out
                              initiatives                                                                 3. Focus on higher-impact/
                                                                                                             easier-to-execute
                                    Next
                                                                                                             opportunities
                           KSFs steps Responsible
                                                                                                          Impact


                                                                                                                   Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s      Forecasted   Impact of
                                                                                                     4. Build a fact base and size
                                discussion   gap          time                                          selected opportunities
                                Approach to No-regret     Potential
                                closing gap initiatives   impact                                                         Potential
                                Save desk    KSFs         Next steps                                  Rationale          impact
                                summary

                                                                        5. Develop KSFs with
                                                                           aggressive work plans
                                                                               Description of
                                                                        KSF    desired state




                                                                                                                                                           20
STEP 4 – BUILD A FACT BASE AND SIZE SELECTED OPPORTUNITIES
                                     Gather basic facts on why we believe it is an
                                     attractive opportunity
                                     Perform quick, back-of-envelope first-cut sizing,
                 Size                using various assumptions (aim to be MECE)
                 opportunities       Develop workplan to refine sizing if initiative
                                     appears impactful
                                     Complete analytics and confirm sizing
                                     Calculate financial impact (savings, break-even)

                                     Evaluate required resources
Build a fact                         Evaluate required systems/processes
                 Evaluate ease
base and
                 of implemen-
size selected                        Consider other obstacles
                 tation
opportunities
                                     Confirm ease of implementation
                                     (high, medium, low)

                                     Select high impact/easy-to-implement
                 Prioritize          opportunities
                 opportunities
                                     Map impact against goal
                 and map
                 against goal        Select/identify additional opportunities if goal not
                                     achievable with selected opportunities

                                                                                            21
Rigorous hypotheses-driven workplans can be used to track the data gathering
effort to size and build a fact base for multiple initiatives.




WORK PLAN FOR WEEK OF 1/10                                                                  ILLUSTRATIVE




Initiative        Hypothesis       Analysis          Data source       Responsibility   Timing
No regrets
1.
2.
3.
4.

More involved
1.
2.
3.
4.




                                                                                                           22
A rationale, or fact base, should be built for each initiative.




RATIONALE FOR SAVE DESK INITIATIVE                                                        CUSTOMER RETENTION
                                                                                          EXAMPLE




          Why we believe this
          could be an opportunity                                 Potential impact
            Save performance (number of saves
            per disconnect calls) varies greatly by
            rep (from 5% for bottom 10 reps to
            40% for top 10 reps)
                                                                   20,000-25,000 subscribers saved
            All disconnects are handled at
                                                                   in 1999
            customer care, supporting focused
            improvement                                            $20 million margin impact in 1999
            Reps currently are not focused on
            saving customers and do not use
            standardized scripts, nor “words that
            work”




                                                                                                               23
               Existing data should be used to perform rough-cut sizing. In this example, rep
               performance variability is used to justify potential improvements.




IMPACT OF SAVE INITIATIVE                                                                                 CUSTOMER RETENTION
                                                                                                          EXAMPLE




                December per-                          Retroactive potential save performance improvements
                specialist save                        Number of saves
                performance                                                                                         ~3X
Specialist rank Percent                                                                                           increase
                                                                                             ~2X
                                                                                           increase
Top 10
Top quartile
2nd quartile
3rd quartile
4th quartile
Last 10                                                  Actual December      If all disconnect calls had been handled by
Average                                                  1998 saves              Top quartile            Top 10

Median




                                                                                                                               24
                           Even when sizing is difficult, a quick break-even analysis -- using a few logical
                           assumptions and showing a low breakeven point -- can be sufficient to make a
                           decision.

THE BREAK EVEN NUMBER OF SALES FOR THE INITIATIVE IS MUCH LOWER THAN MOST                                                             EXAMPLE
PESSIMISTIC SCENARIO




 Key assumptions
                                                                               BREAKEVEN ANALYSIS



         • Fixed cost of initiative is
           $1,000,000
                                                                               Net $ impact of program


         • Variable cost per sale is $1,000
                                                                                 $1,000,000 minimum
                                                                                 net impact of initiative
         • Projected average sales price
           is $3,000                                                                Breakeven
                                                                                       point

         • Most pessimistic scenario from
           Marketing is 1,000 sales                                                      500                1,000         Mumber of
                                                                                         sales              sales         sales
                                                                ($1,000,000)                                (minimum
                                                                                                            impact of
                                                                                                            initiative)




Source: Marketing; team analysis

                                                                                                                                            25
STEP 4 – BUILD FACT BASE AND SIZE SELECTED OPPORTUNITIES
                                                                                                 Common pitfalls
                                      Gather basic facts on why we believe it is an attractive
                                      opportunity                                                In depth sizing launched when back-of-envelope
                                                                                                 analysis and quick break-even calculation is
                                      Perform quick, back-of-envelope first-cut sizing, using
                                                                                                 sufficient
                  Size                various assumptions (aim to be MECE)
                  opportunities       Develop workplan to refine sizing if initiative appears    Work plan not carefully developed; unnecessary
                                      impactful                                                  analysis performed

                                      Complete analytics and confirm sizing



                                      Evaluate required resources
                                                                                                 Resources and management time required for
                                                                                                 initiatives understated
Build fact base   Evaluate ease of    Evaluate required systems/processes
and size          implementation                                                                 Lead time for systems changes underestimated
selected
opportunities                         Consider other obstacles                                   Obstacles/difficulties from other functions not
                                                                                                 anticipated
                                      Confirm ease of implementation (high,
                                      medium, low)


                                      Select high impact/easy-to-implement opportunities
                  Prioritize                                                                     Many easy-to-implement but low impact initiatives
                  opportunities and                                                              implemented and/or additional opportunities not
                  map against goal    Map impact against goal                                    launched even when required (align against gap
                                      Select/identify additional opportunities if goal not       and ensure the gap closed)
                                      achievable with selected opportunities
                                                                                                                                                     26
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                         2. Generate list of potential
 Define the problem                                                                         opportunities                   Rollout successful initiatives

                                             Forecast Plan          Gap




                           7. Launch and rollout
                              initiative                                                                    3. Focus on higher-impact/
                                                                                                               easier-to-execute
                                    Next
                                                                                                               opportunities
                           KSFs steps Responsible
                                                                                                            Impact


                                                                                                                     Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s        Forecasted   Impact of
                                                                                                       4. Build a fact base and size
                                discussion     gap          time                                          selected opportunities
                                Approach to No-regret       Potential
                                closing gap initiatives     impact                                                         Potential
                                Initiative     KSFs         Next steps                                  Rationale          impact
                                summary

                                                                          5. Develop KSFs with an
                                                                             aggressive work plan
                                                                                 Description of
                                                                          KSF    desired state




                                                                                                                                                             27
STEP 5 – DEVELOP KEY SUCCESS FACTORS WITH AN AGGRESSIVE WORK PLAN                                           ILLUSTRATIVE




                                                                 Dedicated project management

                                                                 Appropriate level of resources
                                      Use KSFs learned
                                                                 Impactful marketing tools
                                      through previous
                                      experience                 Effective metrics and tracking mechanism

                                                                 Appropriate systems and processes in place


                        Develop key   Discuss/brainstorm
                        success       additional KSFs with key
Develop Key             factors       stakeholders
Success
Factors with
an aggressive           Build
work plan                             Validate KSFs against
                        aggressive    proposed end state of
                        KSF-based     initiative
                        work plan




Source: Team analysis                                                                                                      28
It is crucial to develop a set of key success factors for each initiative.




KEY SUCCESS FACTOR PRINCIPLES



                             Why are they                 Checklist for good
What is a KSF?               important?                   KSFs
  Key success factors          Serve as a framework          Clear description of
  are the required             for up-front thinking         desired end state
  ingredients for a            Provide a project             Specific and
  successful initiative        management process            actionable
  Typical KSF categories       – KSFs are assigned to        Measureable
  – Project management           individuals                 MECE                   Experience
  – Process                    – Scheduling of project       Parallel structure     shows that the
  – Systems                      is driven by KSF-           Assignable to          use of KSF-
  – Marketing tools              based milestones            individuals            based
  – Key metrics                – Common reference                                   management
  – Resourcing and               framework to ensure                                increases the
    staffing                     nothing falls through                              probability of
  – Training                     the cracks                                         success
  – Incentives                 Serve as a common
                               platform for
                               stakeholders, upward
                               and team
                               communications




                                                                                                     29
Key success factors for each initiative need to be exhaustive and specific.
Experience indicates that initiatives launched without prior generation of a
complete list of KSFs have a higher failure rate.




KEY SUCCESS FACTORS FOR FRAUD PREVENTION INITIATIVE                                        CUSTOMER RETENTION
                                                                                           EXAMPLE
KSF                     Description of desired state
Appropriate level         Adequate number of resources and skill level of resources
of staffing
Dedicated project         Dedicate project manager
management                – Enforcing timelines            – Implementing continuous improvement
                          – Managing resources             – Monitoring results
Key stakeholders          Buy-in from key stakeholders (channels, finance, marketing, systems, etc.)
engaged                   secured
Impactful triggers        Triggers rapidly verifiable by fraud/credit desk agent
identified                Triggers truly identifying fraud/credit policy nonadherence
Effective process         Clear process to filter accounts, audit accounts, and identify accounts requiring
in place                  action
Corrective actions        Tree of specific actions to be taken on fraudulent/incorrect accounts created and
identified                process to take action in place
Required systems          Temporary system in place to accelerate audit of accounts
in place                  Long-term systems change request launched to automate process
Effective metrics         Metrics and daily tracking mechanism to monitor impact on churn, fraud, credit
and tracking              policy application
mechanism
Legal approval            Legal approval obtained to take action
Targeted coaching         Resources frequently coached/trained/updated on bread-practices fraud/credit
and training              audit techniques


                                                                                                                30
For larger, multi-phase projects, it is useful to define the KSFs for each phase.




KEY SUCCESS FACTORS FOR PHASE 1                                                            CUSTOMER RETENTION
                                                                                           EXAMPLE
                                Key success factors          Phase 1 required end-state
                                Dedicated project             Full-time coach in place
                                management                    50% project manager in place

                                Key stakeholders              Concept socialized with key stakeholders
                                engaged                       (finance, marketing, channels)

                                Impactful triggers            Fraud and credit triggers identified and available
 Phase 1                        identified                    for reps

 • Launch fraud                 Filtering process in place    Orders filtered by high-churn reps and/or high-
   initiative with 2 or                                       churn regions
   more reps, beginning                                       Systems improvements launched to prefilter by
   with manual process                                        fraud and credit triggers

 • Implement                    Auditing process in place     Clean process and guidelines defined – what to
   automated filtering                                        look for and where to find it
   as it becomes                Corrective actions            Clear specific actions and guidelines in place,
   available                    identified                    including stopping/holding orders, calling
                                                              customers, and providing rep feedback

                                Impact on revenues            No corrective action taken in “mild” cases
                                mitigated                     Impact on revenues closely monitored

                                Required systems in           Requests in place to automate credit adherence
                                place                         and contain fraud triggers
                                                              Discussions launched to optimize audit process

                                                                                                                   31
                     KSFs should be used as the basis for each initiative’s workplan.

SAMPLE KSF-BASED WORK PLAN                                                                                                ILLUSTRATIVE



Key Success Factor                       Responsible                       Jan          Feb         Mar            Apr     May


Appropriate level of staffing                                                                  Structure
Required systems in place
Improved access to data/tools
  – Sizing an developing initiatives
  – Managing initiatives
  – Tracking and measuring
  – System changes – high priority
                                                                                                            Accelerated    Latest date
Key stakeholders engaged in cross-                                                                             date
functional relationships
  – Assigned contracts for most
    important organizations
  – Face-to-face meetings with all key
    stakeholders
  – Mid-year review with stakeholders
  – Shared metrics
                                                                                              90 day plan                 Shared metrics




                                                                                                                                           32
     STEP 5: DEVELOP KEY SUCCESS FACTORS WITH AN AGGRESSIVE WORK PLAN –
     COMMON PITFALLS

                                                                              Common pitfalls
                                                                              Lessons from previous experience
                                                Use KSFs learned through
                                                                              ignored or inappropriate lessons
                                                previous experience
                                                                              drawn from experience

                             Develop KSFs
                                                Discuss/brainstorm
                                                additional KSFs with key      Important KSFs omitted
                                                stakeholders

Develop Key                                     Validate KSFs against         KSFs will not lead to proposed
Success                                         proposed end state of pilot   end state of pilot
Factors with an
aggressive
work plan

                             Build aggressive
                                                                              Work plan not actionable enough,
                             KSF-based work
                                                                              or does not force accountability
                             plan




     Source: Team analysis
                                                                                                                 33
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                         2. Generate list of potential
 Define the problem                                                                         opportunities                   Rollout successful initiatives

                                             Forecast Plan          Gap




                           7. Launch and rollout
                              initiative                                                                    3. Focus on higher-impact/
                                                                                                               easier-to-execute
                                    Next
                                                                                                               opportunities
                           KSFs steps Responsible
                                                                                                            Impact


                                                                                                                     Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s        Forecasted   Impact of
                                                                                                       4. Build a fact base and size
                                discussion     gap          time                                          selected opportunities
                                Approach to No-regret       Potential
                                closing gap initiatives     impact                                                         Potential
                                Initiative     KSFs         Next steps                                  Rationale          impact
                                summary

                                                                          5. Develop KSFs with an
                                                                             aggressive work plan
                                                                                 Description of
                                                                          KSF    desired state




                                                                                                                                                             34
                To successfully implement initiatives, support from other organizations is almost
                always needed                                                                                CUSTOMER RETENTION
                                                                                                             EXAMPLE


STEP 6 - TELL THE STORY TO BUILD SUPPORT
                                                                                                              Most critical stakeholders



     Implementation requires support from many stakeholders


                 Finance        Rest of         Marketing       Channels
                               marketing
  Operations
                                                      ParentCO.
                 Rest of
                                 Systems
                company
                                                    Other       Finance
       Other
                                  Retention
                                 organization                                                 It is critical to secure buy-
                                                                                                  in from stakeholders
                                                              Industry
   Provider A            Other                              associations

           Contractors                                 Other


 Provider B              Provider C         Regulatory          Other



                                                                                                                                           35
A compelling storyline explains the logic for action and helps to win support within
the organization.




TYPICAL STRUCTURE OF STORYLINE                                                                       ILLUSTRATIVE



                        Conclusion        The PMO needs to take actions
                                          The PMO needs to take actions
                                          1, 2, 3 to close the project gap
                                          1, 2, 3 to close the project gap



Argument elements


           Situation:
           Situation:                            Complication:
                                                 Complication:                         Resolution:
                                                                                       Resolution:
           Project needs to
           Project needs to                      At current pace, gap
                                                 At current pace, gap                  Business must take
                                                                                       Business must take
           close the gap
           close the gap                         will not be achieved
                                                 will not be achieved                  actions 1, 2, 3 with
                                                                                       actions 1, 2, 3 with
                                                                                       specific work plans
                                                                                       specific work plans




Back up


           Challenges
           Challenges                            Reasons
                                                 Reasons                               Actions
                                                                                       Actions
           1, 2, 3
           1, 2, 3                               1, 2, 3
                                                 1, 2, 3                               1, 2, 3
                                                                                       1, 2, 3



                                                                                                                    36
                                              A short and crisp presentation is often the most effective tool to build the case for
                                              an initiative.




STORYBOARD OF TYPICAL PRESENTATION TO KEY STAKEHOLDERS                                                                                                                                                                                                                                                                                                                                                                                                                                             ILLUSTRATIVE



Today’s discussion                                                                                                                                       Forecasted gap                                                                                                                                                                                                    Impact of time on closing the gap
• Explain goal and gap                                                                                                                                               FORECASTED GAP*                                                                                                                                                           ILL USTRATIVE
                                                                                                                                                                                                                                                                                                                                                                                                                                IMPACT OF TIME ON CLOSING GAP                                                                         EXAMPLE




• Explain overall approach for initiatives                                                                                                                           Current run rate . . .


                                                                                                                                                                     16.0
                                                                                                                                                                                                                                                                                         . . . generates a gap to target                                                                                                        The longer the gap goes unaddressed . . .

                                                                                                                                                                                                                                                                                                                                                                                                                                Actual quarterly gap
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              . . . the greater the challenge

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Cumulative gap



• Review progress to date                                                                                                                                            14.0

                                                                                                                                                                     12.0
                                                                                                                                                                                                                                                    Forecast at
                                                                                                                                                                                                                                                    current run
                                                                                                                                                                                                                                                    rate
                                                                                                                                                                                                                                                                                                                                                                                                                                Q1
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Gap already too
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         considerable to be
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         closed


• Agree on next steps                                                                                                                                                10.0

                                                                                                                                                                      8.0                                  Gap
                                                                                                                                                                                                                                                    Target
                                                                                                                                                                                                                                                                                                                                                                                                                                Q2



                                                                                                                                                                      6.0
                                                                                                                                                                                                                                                                                                                                                                                                                                Q3                                   Action is
                                                                                                                                                                      4.0                                                                                                                                                                                                                                                                                            taken

                                                                                                                                                                      2.0
                                                                                                                                                                                                                                                                                                                                                                                                                                Q4
                                                                                                                                                                      0.0                                                                                                                     Plan                    Total fore-            Gap to plan
                                                                                                                                                                                                                                                                                                                      cast




                                                                                                                                                                                                    May




                                                                                                                                                                                                                                        Nov
                                                                                                                                                                                  Feb




                                                                                                                                                                                                          Jun


                                                                                                                                                                                                                      Aug
                                                                                                                                                                                                                Jul
                                                                                                                                                                                        Mar
                                                                                                                                                                                              Apr




                                                                                                                                                                                                                                  Oct
                                                                                                                                                                            Jan




                                                                                                                                                                                                                            Sep




                                                                                                                                                                                                                                              Dec
                                                                                                                                                                     * In this example, gap results from the forecas t being higher than the plan – e.g., expenses, customers los t, s taff turnover. The methodology also works where the plan is higher than the
                                                                                                                                                                       forecast (e.g., s ales, profit)                                                                                                                                                                                                                           Source: Team analys is
                                                                                                                                                                                                                                                                                                                                                                      10                                                                                                                                                                        11




Approach to closing the gap                                                                                                                              Potential impact due to no-regret                                                                                                                                                                                 Rationale for initiative
          STEP 4 – BUILD A DETAILED WORKPLAN                                                                                  EXAMPLE
                                                                                                                                                         initiatives                          POTENTIAL IMPACT DUE TO NO-REGRETS INITIATIVES –                                                                                       FIRST CU T ESTIMATE                           SAVE DESK SUMMARY                                                                              CUST OMER RET ENT ION
                                                                                                                                                                                              CUSTOMER RETENTION EXAMPLE                                                                                                                                                                                                                                                          EXAMPLE
                                                                                                                                                                                              Thousand customers
                                                 “Close gap this year”                  Characteristics

                                                  Execute no-risk/no-                   • Positive impact, quickly                                                                                                                                                                                                                                                                             Why we believe thi s
                                                                                        • Executable through focused initiatives                                                                                                                                                                                                                                                               c oul d be an opportunity                                  Potential i mpact
                                                  regret initiatives
                                                                                        • Low risk                                                                                                                                                                                                                                                                                               Save performance (number of saves                         Potential to reduce – 1999
                                                                                                                                                                                                                                                                                                                                                                                                 pe r disconnect calls) varies great ly by                 disconnects by 6, 700-16, 800
                                                                                                                                                                                                                                                                                                                                                                                                 rep (f rom 2% f or bottom 10 reps t o
                                                                                                                                                                                                                                                                                                                                                                                                 31 % for t op 10 reps)
          How can we achieve the
                                                                                                                                                                                                                                                                                                                            These are                                                            Mo re than 70% of disconnects are
          goal of ____?                                                                                                                                                                                                                                                                                                      These are
                                                                                                                                                                                                                                                                                                                                                                                                 handled at customer care, supporting
                                                                                                                                                                                                                                                                                                                            conservative
                                                                                                                                                                                                                                                                                                                             conservative                                                        focused improvement
                                                                                                                                                                                                                                                                                                                            estimates; however,
                                                                                                                                                                                                                                                                                                                             estimates; however,
                                                 “Build capabilities for                                                                                                                                                                                                                                                    they may contain
                                                                                                                                                                                                                                                                                                                             they may contain                                                    Bulk of disconnect calls currently
                                                 this year and beyond”                                                                                                                                                                                                                                                      some double-counting.
                                                                                                                                                                                                                                                                                                                             some double-counting.                                               answe red by Tier 1 (inexperienced
                                                                                                                                                                                                                                                                                                                            The team will be
                                                                                                                                                                                                                                                                                                                             The team will be                                                    sp ecia lists) and then t ransferred t o
                                                  Develop and execute                   • Based on segments of high-value                                                                                                                                                                                                   revising these as more
                                                                                                                                                                                                                                                                                                                             revising these as more                                              Tier 2 (exp erienced specialists)
                                                  more involved initiatives               customers                                                                                                                                                                                                                         data and analyses
                                                                                                                                                                                                                                                                                                                             data and analyses
                                                                                        • Focus on managing through customer                                                                                                                                                                                                become available
                                                                                                                                                                                                                                                                                                                             become available                                                    Re ps d o n ot use standardized scripts,
                                                                                          milestones                                                                                                                                                                                                                                                                                             no r “words that work”
                                                                                                                                                                                                    Projected               Launch save               Target high-            3 medium                 5 smaller
                                                                                                                                                                                                    churn gap               desk                      sales, high-            oppor-                   oppor-
                                                                                                                                                                                                                                                      churn reps              tunities                 tunities



                                                                                                                                                                                               Source: Sources                                                                                                                                                                     Source: Team analys is
                                                                                                                                                   30                                                                                                                                                                                                                38                                                                                                                                     36




 KSFs         Key succes s factor s for each ini tiativ e need to be exh au st ive an d sp ecific.
              Exp erien ce ind icates th at in itiatives lau nch ed w ith ou t p rior g enerat ion of a
                                                                                                                           C H-352012-0 20-2e b/ sbpNN



                                                                                                                                                         Why this is important to you                                                                                                                                                                                      Next steps
              comp lete lis t of KSFs h ave a h igh er failu re rat e.




              KEY SUCCESS FACTORS FOR FRAUD/CREDIT DESK                                                         CUST OMER RET ENT ION
                                                                                                                EXAMPLE
               KSF                        Description of desi red state
               Appropriate level            Adequate number of resources and skill level of resources
               of staffing
               Dedicated project            Dedicate project manager
               management                   – Enforcing timelines                 – Implementing continuous improvement
                                            – Managing resources                  – Monitoring results
               Key stakeholder s            Buy-in f rom key stakeholders (channels, finance, marketing, etc. ) secured
               engaged
               Impactful trigger s          Triggers rapidly verif iable by fraud/credit desk agent
               identified                   Triggers truly identifying fraud/credit policy nonadherence
               Effective process            Clear process to filter GAs to audit, audit accounts, and identify accounts requiring
               in pl ace                    action
               Corrective actions           Tree of specific actions to be taken on fraudulent/ incorrect accounts created and
               identified                   process to take action in place
               Requir ed system s           Temporary system in place to accelerate audit of accounts
               in pl ace                    Long-term systems change request launched to aut omate process
               Effective m etrics           Metrics and daily tracking mechanism to monitor impact on churn, fraud, credit
               and tracking                 policy application
               mechanism
               Legal approval               Legal approval obtained to take action
               Targeted coaching            Resources frequently coached/trained/updated on bread-practices fraud/credit
               and training                 audit techniques

                                                                                                                                                  37




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     37
7 STEPS TO DEFINING AND INITIATING ACTION




                                     1. Establish the goal

                                                                                         2. Generate list of potential
 Define the problem                                                                         opportunities                   Rollout successful initiatives

                                             Forecast Plan          Gap




                           7. Launch and rollout
                              initiative                                                                    3. Focus on higher-impact/
                                                                                                               easier-to-execute
                                    Next
                                                                                                               opportunities
                           KSFs steps Responsible
                                                                                                            Impact


                                                                                                                     Ease of execution



                               6. Tell the story to build
                                  support
                                Today’s        Forecasted   Impact of
                                                                                                       4. Build a fact base and size
                                discussion     gap          time                                          selected opportunities
                                Approach to No-regret       Potential
                                closing gap initiatives     impact                                                         Potential
                                Initiative     KSFs         Next steps                                  Rationale          impact
                                summary

                                                                          5. Develop KSFs with an
                                                                             aggressive work plan
                                                                                 Description of
                                                                          KSF    desired state




                                                                                                                                                             38
STEP 7 – LAUNCH AND ROLLOUT INITIATIVES                                                                                                ILLUSTRATIVE

                                                                                                  Status
                                       Regularly review status of pilot against                                          Responsibilities
                                                                                                  Next steps
                                       KSFs with key stakeholders
                                                                                                  Road block
                    Manage to KSF-     Communicate work plan to other                             removal/escalation     Timing
                    based work plan    stakeholders
                                       Iterate/expand pilot based on KSFs/key
                                       learnings/reflection
                    Measure impact     Leverage stakeholders to remove road blocks
                    against goal
                                       Determine who should lead program, and who
                                       should complement
Launch              Develop process/
                                       Determine required resources
and roll-           infrastructure
out                 framework
initiatives
                                       Define process

                                                                   Establish cross-functional project            Make key resources available
                                       Formalize cross-                                                          Personally review regularly
                                                                   manager
                                       functional
                                       stakeholder                 Gain commitment from functional               Build into ops objectives
                                       sponsorship                 leaders to make rollout a high priority       Sponsor roadblock removal
                    Refine and
                    roll out                                                                                     Team leadership
                                                                   Transfer responsibilities                     Project management
                                                                                                                 Formalized ongoing communication/
                                       Transfer project from                                                     update
                                       pilot team to roll out
                                       team                                                                      Pilot
                                                                   Transfer resources
                                                                                                                 New

                                       Periodically reevaluate/    Transfer pilot key learnings
                                       improve program

Source: Team analysis                                                                                                                                 39
  STEP 7 – LAUNCH PILOTS AND ROLLOUT INITIATIVES – COMMON PITFALLS


                                                                              Common pitfalls

                                   Regularly review status of pilot against   Stakeholders not engaged regularly enough
                                   KSFs with key stakeholders
                Manage to KSF-
                                   Communicate work plan to other             Buy-in from stakeholders not obtained for work plan
                based work plan
                                   stakeholders                               (e.g., end products, timing)
                                   Iterate/expand pilot based on              Pilot considered static
                                   KSFs/key learnings/reflection

Launch                             Leverage stakeholders to remove            Pilot team devoting too much effort to removing
and                                road blocks                                roadblocks (versus elevating issues)
rollout         Measure impact                                                Impact not resized based on gap and
initiatives     against the goal                                              implementation


                                   Develop process/infrastructure             Clear cross-functional process
                                   framework                                  and roles not defined

                                   Formalize cross-functional                 Cross-functional project
                Rollout            stakeholder sponsorship                    manager not assigned or not
                                                                              engaged
                                   Transfer project from pilot team           Key learnings from pilot not
                                   to roll out team                           transferred to rollout team

                                   Periodically reevaluate/                   Project not periodically reviewed leading to
                                   improve program                             – Plateauing
                                                                               – Mismatch with goal

  Source: Team analysis                                                                                                             40
Comments & Questions




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Description: Problem of Project Manager document sample