Last week I had the opportunity to meet Dr. Harold Kerzner in the conference that he gave at my company and later also participated with him in a round table where we met the top PMO Directors in Madrid.
In the following, I am going to detail the most relevant pieces of advice that Dr. Harold Kerzner shared with all of us, and also some of my personal thoughts and feeling during this journey.
In his conference titled “Managing Challenging Projects and Creating Effective Project Metrics”, Dr. Harold Kerzner started with the difference between Project Management 1.0 and Project Management 2.0, going over nearly every point about what is stated in wikipedia and also in an article we published some time ago.
But, he presented some interesting insights. He talked about measuring project success based on metrics according to the classical triple constraints, and he said “…and do you want to know my opinion? They did a terrible job!”. He talked to us about SIX CONSTRAINST to make the Tradeoffs:
- Static Value
He told us “do you want to know my definition of success in a Project at Indra (my company): a successful project at Indra is the one that creates Business Value for the Business of Indra. So, there are People that incorrectly measure success of a project based on Scope, Time, Cost (or any of the Six Constraints).”
Most of his keynote was about that project success can not be based on reaching Scope, Time and Cost. This is obsolete. In fact, success is delivering the Expected Value to the Business inside the Scope, Time and Cost restrictions:
“The market place is changing, you cannot any longer keep managing your projects based on Scope, Time and Costs.”
He explained that “Project Management has evolved and has changed.” Based on his explanation, I built in my notebook the following mnemonic formula:
PM 2.0 = PM 1.0 + distributed collaboration
I remember his words: “The future is having all project standards of a project in your mobile phone or ipad (no more project reports will be required …but what will be required is Project Dashboards – metric information! We need to develop better metrics, better KPIs, better dashboards, better information!) …and of course, your children will teach you how to use it :)”
“Most executives today don’t have time to read all the reports that are piled on their desk. Executives require Metrics and Dashboards. What a great way to do that!”
Then, he presented us a very interesting resource for finding KPIs: KPILibrary.com. An amazing website with 6500+ KPIs, completely free!. They give you the metrics.
Moving Project Management From Customer Satisfaction to Customer Value
He said that “Customer satisfaction is being replaced by Customer Value” and that “for every Constraint you have, you need to have a Metric”, so I wrote in my notebook the following mnemonic formula based in his words:
Moving from Time/Cost/Scope to Quality/Value/Satisfaction
So he completed this part saying “the Sixth Edition of PMBOK in the future should no longer focus on Management themes (e.g. Scope Management), but doing it in Metrics themes.” In my point of view, he said this because we were in a Metrics conference, but I don’t think that Metrics by themselves provide Value to Business, they only help you to check it.
I wondered: What about deliverable-project focus? For example metrics focused on the deliverables, not only over processes? In fact, I think that deliverable-focused projects and Metrics fit perfectly!. For example, in these days in Spain, politicians in electoral campaigns show citizens simple dashboards and graphs to show their achievements.
Harold Kerzner: “Metrics Show The Past, and KPIs The Future!”
Dr. Harold Kerzner explained to us that “Executives are more interested in what is going to happen (KPIs) than where we are today (Metrics). So Trends are KPIs. I never report Time, Cost or Scope to Executives, I report Trends. What Executives want to see is the future, not the present.”
But he also warned us: “Be careful!, You should select the Metrics You Need, Not the Metrics You Want.” This is a selection process, you don’t have to overload the Executives. “Beware of Micromanagement Issues”. If you put too many metrics in a dashboard, how do you expect that Executives are going to know what Metrics are the ones that Matter? So, putting the wrong Metrics in Dashboards is a common way to fail.”
He said “every time we talk about Metrics, we talk about a Metrics Library (i.e. a classification/categories of Metrics).”
There are 4 Key Measurement Questions:
- What should be measured?
- Who will be responsible for measuring?
- How will it be measured?
- When should it be measured?
And “these 4 questions should be written and answered at the beginning of each project.”
In fact, as a Project Manager you have 3 information systems (dashboards):
- For You
- For Your Company
- For Your Stakeholders
“You show me an Executive that always make the right decisions, and I will show you an Executive that doesn’t make decisions.”
“You show me a company that never fails in projects, and I will show you a company that does not make projects”.
Please, don’t make the perfect set of KPIs, build those that Stakeholders and Customers will “buy-in to” and that will reflect success.
He presented several examples of KPIs, and one that I remember very well was “Number of Best Practices”.
About the graphs he said that he doesn’t like gauges very much: “we can’t use gauges to represent trends”. Later, he showed us an interesting alternative option: “Progress Gauges”, with a number in the center (last metric) and over it a semi-circle that represents progress (tendency) with several colors.
“When measuring times, a very important variable is if the deliverable was accepted or rejected. You can deliver on time and your customer rejects your deliverable, or you can be late but your customer accepts your deliverable”
He also said that there are qualitative metrics very difficult to measure: “How do you measure Collaboration, Commitment, Creativity, Innovations, etc.?”
We can think that “if our value metric is 4, we are getting superior performance”, but probably it is not.
“Imagine you are managing a project and it is behind Time and Cost, do you think your customer will cancel your Project? It depends. It all depends if you are providing VALUE.”
He presented the following Components of Value:
So, he concluded that we need to focus on Value Metrics.
“Are you using Value Metrics? (make sure that you use sensitive information in your project accounting books)”
For example: “Time is not a component of a Value Metric”.
Executives Require Project Management Dashboards!
About dashboards, Harold Kerzner said that they “convert rough data into something that it is meaningful”.
The most important image in the dashboard is probably located in the upper-right because we always remember the last thing that we have seen, not the first. He gave as an example his book cover, but also said that there are other points of view. For example IBM chose for placing their logo in the upper-left corner of the book.
When talking about dashboards, he said that the most common are “Traffic Light Reporting”. Then presented a commercial Dashboard Product: “do you know what they do? (referring to the company) They only do Dashboard Design, and nothing else” (I think probably they paid him).
Then he asked us: “how do we know that customers are properly interpreting our Dashboard Information?”. We need avoid Misleading Indicators: indicators that are not always giving us the correct information. And highlighted the importance of the “Metric Owners” role.
With this, the conference is finished, but not the journey.
Discussing The Need For a PMO
In the evening we met in a “round table” the top PMO Directors from Madrid City and Dr. Harold Kerzner and were discussing about PMOs and their Leadership role. One of the sentences that I remember from him is the one I have used in the title of this article: “Forget What PMBOK Says!, Project Management is LEADERSHIP WITHOUT AUTHORITY”. In fact, I agree 100% with his point of view. Being a Project Manager, and also driving a PMO is all about Leadership. The point of our Leadership role is that we don’t have Authority. So, special skills, techniques and tools are required by us for performing our job. This is a career that is not about Scope, Time, Cost and so on. This is a career about Leadership Without Authority.
In another moment, going ahead with the conversation, although I am a PMO Director I took a role of “the PM skeptic”, and asked him “if the PMO is the solution, what was the question?”. In Dr. Harold Kerzner’s answer he seemed to be clear that we need of a PMO, but I didn’t find in his words a good reason for someone skeptic.
In my point of view, we can’t set up always a PMO with a standardized or fixed tasks (e.g. providing guidance, PM training, best practices, processes, tools, metrics, KPIs and dashboards). When a PMO is set up is because there is a need, something needs to fix (probably there was a lack of KPIs and dashboards, but also probably not). That is, in fact a PMO is set up for solving problems.
But any business faces different problems and the PMO needs to be adapted to address and solve those problems. If the PMO manages to solve those problems, it will be providing real Value to Business. But if the PMO only provides methodology and templates, but is not facing and dealing with the business’ real problems, probably this PMO will not last more than 2 years.
Well in summary, this was an awesome journey sharing with leaders our experiences and concerns handled by Dr. Harold Kerzner and I hope to have the opportunity in the future of meeting him again. If you have the opportunity, I highly recommend that you attend to one of his conferences.
Do you agree that Project Management is LEADERSHIP WITHOUT AUTHORITY?
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