Enhancing PMP with Business Process Excellence – Part I Success with Key Performance Indicators

Linking PMP Leaders’ KPI with Customers’ Success

Dr. Shree Nanguneri and Mr. Gustav Toppenberg

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Brief Introduction of the current PMP and LSS status quo:

Whether we refer the PMP or LSS leadership success there is a clear process that is transparent as shown below:

With the PMP space we are looking for the documented achievement relating to:

• Level of experience in project management (PM) with a specified minimum hours (usually 4500)

• Length of contact hours in PM with a specified minimum hours (usually 35) and

• Passing of a standardized knowledge test Provided by an internationally established and reputed institute

In the LSS* space we associate the documented achievement relating to:

• Length of contact hours in a classroom (physical or virtual) where the time varies (based on source of trainee’s knowledge provider)

• Passing of a knowledge test – Non standardized globally – standardization is just emerging over the last decade

*LSS – Note that we scoped out project application requirements due to several factors impacting its outcome:

• Who is the knowledge provider?
• Capability to mentor them to successful projects?
• Is training part of the trainee’s employer deployment strategy?
• Is the trainee putting in a personal effort outside of their employer’s enterprise?
• Is employer defining the criteria of project success at a local or global level?
• Is the investment associated with project effort affordable (consultant’s time increases)?
• Is there a minimum number in projects needed to be executed?
• What is the minimum lapse time before one is eligible to apply for certification?

Thus there are several uncontrollable factors impacting the within and between variance in the LSS and PMP space and can cause confusion. One can hypothesize a significant variance in productivity of PMP/LSS professionals.

Linking PMP Leaders’ KPI to the Success of the Customer:

In this part of our 3-part series, we will discuss the opportunities (or problems otherwise) available for project leaders while they ponder hybridizing problem solving skills with project managing skills. We have witnessed more than enough situations where PMPs have excellent project management skills, while lagging in problem solving solutions. On the other hand, LSS professionals are coached to solve complex problems, however may lack in their ability to manage their teams and projects well to deliver a sustainable solution. Part 2 of our series will primarily deal with project timeline validation and management issues, while part 3 (the final) will highlight potential solutions to the problem areas discussed in parts 1 and 2.

The KPI (Key Performance Indicator) of leaders in the LSS or PMP world in theory should be directly correlated with the success of the professional’s customer. It can be one’s employer, a consultant’s customer or the clients of a growing or well established enterprise.

As organizations seek projects involving cross functional teams (local and virtual) this variance we speak of tends to increase and become uncontrollable. Over a period of time it becomes so ingrained within that culture that it is no longer considered to bear a negative impact on the enterprise and/or its customers.

An enterprise and/or self employed professional can seek success in their business and profession only in three different ways:

1. Gain new customers
2. Maintain existing customers and
3. Regain lost customers!

PMP Space:

When a PMP professional executes the three general requirements listed above how does his employer define his KPI at work within that project? Based on the experience of the authors in this article, a few measures have been postulated:

–  Return on Investment (ROI) from the total project

• Measured as [Total Project Revenue/Total Budget Invested]*100  %

–  Defects as in rework associated with this project

• Measured as incremental dollars to deliver project requirements

–  Delays in project executed based on expected completion time

• Measured in time beyond date of delivery as defined by customer

–  Deviations within and between team members resulting in defects/delays

• Measured as defects/delays as listed above

–  Situations arise where management kills a project for different reasons

Learning via the ROI Syndrome:

By defining the KPI of PMP professionals using the ROI, the organization has already set a path of failure for one simple reason:

• Project complexity varies by:
  • Team Dynamics – Number of members
  • Virtual or Local presence
  • Global or Domestic
  • Level of Experience – Entry Level, Recent or Veterans
  • Absolute dollars of project revenue
  • Team member – Ongoing PMP trainee or an established practitioner
  • Nature of Project Requirements – Example – Agile, Scrum, ERP, SAP, etc.

Thus the KPI is a weak measure and could result in confusion for the leader while trying to determine the root cause and any preventable actions for existing or future projects.

Defects in Project:

The defect in a project can be defined simply as rework on an executable item that should have been done right the first time. The defect definition also comes with a variety of factors that are not common across projects even with the same level of complexity.

No two projects bear the same opportunities for defects and so will naturally tend to vary. However, one can associate defects to an assignable “delay” as any defect that can be corrected (not referring to “scrap” type of defects) will result in a delayed time. This directly demands either an additional budget and/or a liquidated type of damage or liability with the customer in the mutually signed commercial agreement. So while measuring defects to seek a KPI, it may be better to integrate this into a delay type KPI discussed below.

Delays in Project:

Delays as a KPI in project can be a direct measurement as they are common and usually associated with either the defects (as described above) or with variation in time and task management within and between team members. Of course team members may also have different levels of skills set causing delays to the overall project.

By using delays in the KPI measures one has to be careful in being able to trace where the delay came from and which team member can it be attributed to? The project leader has to walk a tight here to balance the counseling with the team member as well as clearly establishing the ownership to such delays. If the project is designed based on a series of steps {Delta[time] = Sum[t_i] i = 1…n steps} as opposed to activities in parallel, the delays can be easily attributed (in a relative manner). The team’s morale is impacted based on how the leader assigns a sub-team ownership or narrows it to an individual type of ownership to this delay. If the project’s complexity is increased by steps in parallel the assignable ownership has a higher impact on the team’s morale going forward.

Deviations in Project:

Deviations in project management can be related to the following:

• Going over budget while delivering on time for the project
• Having delivered on time and on budget, but deviations on project requirements

Deviations can result in rework and thus cause delays and even increased budget or costs. In most projects one comes across the 3 Ds. They need to be minimized and/or eliminated.

Conclusions:

From this part we have seen that the linkage between project leaders and customer success is weak and presents an opportunity for PMP professionals to understand the root cause to take preventable actions and achieve team and business success for the enterprise as well as the self employed professional. In part 2 of this series later this week, we will focus on how project timelines can vary and what factors are in play. By gaining an understanding on the same, the KPIs cam be better defined and established while we conclude close that discussion in the final part 3 of this series.

About the Authors

Gustav Toppenberg Gustav Toppenberg is a Sr. PMO Manager in Cisco’s Communication & Collaboration IT group. Gustav is currently responsible for leading the PMO and driving project and operational excellence in his team. During his career at Cisco, Gustav has led several projects in change leadership, acquisition integration, and globalization strategy. He is also part of Cisco IT’s transition to a services-oriented organization (technology, process, and culture), enabling a client-focused, value-driven, cost-effective alignment between IT and business. Gustav is a native of Denmark and serves on the board of directors at the Danish-American Chamber of Commerce in San Francisco and the NorCal chapter of ASP (Association for Strategic Planning). He has a background in strategy consulting, program/project management, and global change management. Gustav has an interest and passion for the convergence of business and technology; he is a natural change leader and constant disruptor. He continuously seeks to occupy the gap between business and technology, thereby leveraging technology solutions to strengthen competitive advantages in business. Gustav is an MBA graduate of the Thunderbird School of Global Management, ranked the #1 U.S. Business School for International Business by the Wall Street Journal and U.S. News and World Report. You can contact Gustav at [email protected]. “Some of the individuals posting to this site work for Cisco Systems, Inc. Opinions expressed here and in any corresponding comments are the personal opinions of the original authors, not those of Cisco.”

Dr. Shree Nanguneri I am a business process improvement coach and consultant and have worked with several corporations in different continents over the last two decades. After having a successful 6-year work experience at GE, I started my own consulting company in 2000. I have been fortunate to successfully deliver across a variety of industries that include the fields of manufacturing, transactional as well as service type environments. I have published a few articles, authored patents and releasing a book in mid 2011. Although not an expert, I can converse reasonably well in Dutch, and Spanish, skills I acquired while working there. To date, the total annualized direct customer benefits from my services have accrued to several hundreds of millions of dollars. I enjoy outdoor activity, meeting people on a global level to mutually benefit each other. I am also thankful to my mentor as well as network members without which some of the achievement listed here would have been impossible.