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What is Project Management and Why is it Important?

Importance of Project Management

What Is Project Management?

Historically, project management was a job function meant only for those dubbed with an official ‘project management’ title. And although logical in concept, today’s business environment proves this traditionalist mindset otherwise.

The [unfortunate] truth about project management is that it’s unavoidable. It is the ‘little brother’ of job roles; quietly crushing the spirits, patience, and project success of unassuming employees everywhere. However, by adopting and applying a new, more realistic mentality towards project management, employees of all roles and functions can turn project management from a necessary evil into a strategic advantage that sets its organization apart from the competition.

As fellow victims of project disaster ourselves, we here at Revenue River would like to extend a bit of insight into our recent discovery of Franklin Covey’s “Project Management for the Unofficial Project Manager” and its impact on our internal project management processes and subsequent project success.

Why Is It Important?

According to the “Project Management for the Unofficial Project Manager” book, most organizations report that between 60 and 80 percent of their work is project-based, yet the vast majority don’t assume any sort of project management responsibilities or receive any sort project management training.

Additionally, the Project Management Institute (PMI), which sets industry standards for managing projects, reports that:

  • Only 8 percent of organizations are considered to be “higher performers” in managing projects
  • Only 45 percent of projects annually meet the goals they’re supposed to
  • 45 percent of all projects are either overdue or canceled altogether
  • 39 percent of projects get done on time
  • 44 percent of projects are completed on budget
  • 53 percent of projects meet the original intent or business purpose
  • For every $100 invested in projects world-wide, organizations experience a net loss of $13.50

So, if we’re spending most of our time working on projects and our business relies on the successful execution of those projects, why do we continue to dodge a sound project management structure and methodology like the plague?

Now, we understand that injecting organizational change can feel daunting and overwhelming, but it doesn’t have to be. Below we detail out various project management tools and processes that you can leverage to streamline your internal project management procedures, discuss how to leverage ‘informal authority in the workplace in order to execute projects on time and on budget, and address the unfortunate consequences of not investing in project management in today’s business environment.

Project Management Tools

The primary purpose of project management tools is to help teams plan, execute and control all aspects of the project. Companies rely on these tools to ensure that each task is completed on  time and that the project stays in scope. Your team will find it easier to stay organized and collaborate better within/across teams.

Time Tracking Tools

Many view developing project plans/timelines as the most critical phase in the project management process. These tools allow project managers to estimate timing and clearly define the goals and objectives of each project. Taking the time upfront to carefully plan each deliverable and assign a person and a date to the task will greatly increase your chance of success. Without a system in place, there is a lack of knowing what tasks should be worked on when. This often affects a teams’ productivity and does not produce good results. Utilizing a project management software brings much needed visibility to the whole team and the client, as well.

Collaboration is another key to successful project management and tools are a great way to make sure everyone is on the same page. When a team member has questions or concerns, they can immediately get the right response through communicating with the team internally (all of the right people working on a specific project are all right there in the same place). It is often also a great way to communicate with external stakeholders keeping everything you will ever need in one place. We all know how important it is to document everything and how frustrating it is having to search in multiple places to find the conversation/information you are looking for.

Each project needs to be completed within a certain budget. A project manager’s goal is to keep the actual cost below, or as close as possible to the estimated cost to maximize the profit earned. Some companies are fine using an excel spreadsheet for this, but project management tools have great features that make tracking budgets much more effective:

  • Time tracking – Documenting time spent on tasks helps automate the invoicing process and helps track billable versus non-billable time.
  • Budget reports – These give you monthly and weekly reports on expenditures, expenses and totals so you can track your budget performance and immediately see if you go over budget.
  • Overall visibility – Keeping that high level visibility just helps keep track of progress and ensures projects don’t go pasts the due dates, which often means going over budget.

There are hundreds of project management tools to choose from, the key is to find one that will best fit the needs of your company. Many of them are very simple and easy to use, but some are just To Do lists. This might work well for you, but we needed something more robust as we have multiple teams working on multiple projects or campaigns at a time. We chose a more comprehensive tool. Some important things to look for are:

  • Ability to create templates so new project timelines are created more quickly.
  • Ability to store resources such as documents, files, links, and notebooks so that the entire team knows right where to go to find what they are looking for.
  • Ability to communicate. The product we use allows us to comment directly on tasks, create messages that are attached to each project, or even chat quickly with team members.
  • Ability to pull reports. This is a great way to quickly see an overview of projects.

Overall, using a project management tool will increase productivity by keeping people on task and creating visibility so it is easy to see exactly where a project lies at any given point. As a project manager, it is imperative to have that high level view of all current projects to keep them on time and on budget.

Project Management Processes

Having processes to follow is very important when running a successful project, no matter the industry or where you fall within the organization. Having structured and defined processes not only ensures a well-organized project but also helps with implementation of all project activities, which should be aimed at achieving the overall goals of the project.

Before starting or initiating any project, it’s important to sit down and talk with all the key stakeholders that have a say and vested interest in the project deliverables and outcomes. Start by identifying these people. Perhaps it’s the CEO, the sales manager, the marketing manager, or even the lead web developer. Meet with each stakeholder individually and talk through their expectations of the project, what success and failure looks like, any aspects of the project that are off the table, and possible risks.

From these conversations, the next step is to pull together important documents that should help guide your project:

  • Project Scope Statement – this document should describe the purpose of the project, the desired results, any exclusions, all communication needs, possible constraints, and who will be responsible for all approvals needed during the execution of the project.
  • Risk Management Plan – this document should include possible risks you might encounter that you and the team have identified, a risk score for each, a strategy for managing these risks (should you encounter them), and the person or persons responsible for addressing them.
  • Project Communication Plan – this document should establish what needs to be communicated, to whom, at what frequency, and through what channel.

Share these documents with the entire team working on the project and get their feedback. By doing this, your team has visibility into what is expected, possible risks associated with the project, and key deliverables within the project scope. Every team member should read and review these documents, acknowledging their understanding of the work at hand. Then, determine the necessary resources, both internal and external, that will be needed for execution. Only then are you ready to start the project.

When it comes to execution, each member of the team carries out their assigned deliverables within a given timeline. This is where a project management tool, such as Teamwork, comes into play and is a vital part of the execution process as well as for tracking progress of the project. Everyone involved in the project should have insight into all deliverables currently being worked on and what’s next in the pipeline.

Determine if these key deliverables are on track or off track and include this information in a weekly status report that should be shared with internal team members working on the project as well as the client. This information is also important to discuss during weekly/biweekly meetings. In these meetings, hold all parties accountable, whether that be the internal team working on the project or the key stakeholders that are directly affected by the success or failure of the project. This process is one of the most important when effectively managing projects, after all, a project isn’t just made up of deliverables but also people. They all need to be bought in for the project to succeed.

When you are nearing the end of the project, it is time to start the re-initiate phase. As a team, discuss the deliverables for the next phase of the project. Build out these project deliverables in a new plan that you will present to the key stakeholders and get their buy in again. As your building the plan, keep in mind that all activities should drive back to the goals of the overall project.

Remember the risk management plan that you built out at the beginning of the project? Now is the perfect time for all team members to review the plan again. Update risks where necessary and remove any risks that are no longer applicable.

Once all project deliverables have been completed, it’s time to follow process to close out the project. Evaluate the entire project. Did you achieve the project goals? Were there mistakes made along the way? Are the stakeholders accepting of the final project outcome? Evaluate your successes and failures as a team and use that information to take the necessary actions for future projects as well as for building out potential success stories.

Managing Informal Authority

So you have your go-to project management processes and tools. That means everything should be easy breezy from there, right? Unfortunately there’s a layer of complication that can prove to be challenging at times: managing informal authority. FranklinCovey defines informal authority as “The Ability to inspire team members to want to play on your team and win, even if they do not functionally report to you.” That sounds simple, but there are a few common struggles.

Three Common Struggles of Having and Effectively Managing Informal Authority

  1. You are likely managing people with competing priorities. In an agency setting for example, you probably aren’t the only project manager team members are receiving task assignments from. PMs can do their best to communicate with each other about how heavy the current workload is for any given individual, but that’s not always possible, and the timing of stakeholder needs isn’t always our friend.
  2. Hearing some version of the phrase, “You’re not my boss.” You’ll likely hear some version of this throughout your project management career. Employees can struggle with managing the expectations of one boss, let alone trying to make room for the requests of someone who doesn’t sign their paychecks.
  3. In a similar vein, you might not have the authority to inflict consequences when tasks aren’t executed well or completed at all. “Inflict consequences” sounds mighty aggressive, and there are numerous ways (below) to mitigate the need for harsh warnings or removing someone from the project team. However, project managers don’t always have the power to remove someone from tasks even if it seems they’ve exhausted all their other options.

We aren’t so cruel as to outline all the ways your life could be miserable without offering some tips of the informal authority trade. Take a deep breath and remember the tips below as you’re navigating potentially choppy waters. (Hey, maybe you’ll dominate all the tips so well that you can float serenely along a babbling brook instead.)

Key Things to Remember If You Have Informal Authority in Your Project

  • Understand the working style and personality of your different team members. There are a lot of ways to do this, but at Revenue River, we use the PDP Pro Scan Survey. Not everyone thinks like you or like the other members of the team. Making an effort to understand the way people communicate, their working styles, etc, can make a huge impact.

  • Lead with empathy. Before you default to anger or annoyance when something isn’t done on time or isn’t up to par, try to put yourself in their shoes and see it from their perspective. Remember everything else that might be on their plate, and brainstorm how you can help rather than attack them (without putting it all on your own shoulders).
  1. Demonstrate Respect. Is it too cliché to say “treat others how you want to be treated?”
  2. Listen First. It’s easier to hear and understand when you aren’t talking.  
  3. Clarify expectations. Make sure everyone is on the same page from the beginning and you’ll avoid conflict in the future.
  4. Practice Accountability. While clarifying expectations, let them know ahead of time that you’ll be holding yourself, your team, and other stakeholders accountable for the deliverables that have been set. We’re all in this together. (More clichés, sorry.)
  • Acknowledge that this is a continuous improvement cycle. One positive of projects is that there’s always a start and end point. If a project was bumpy, remind yourself and your team that you now get to reflect, identify your lessons learned, and improve on the next one.

What Can Go Wrong If You Don’t Have a Project Management Plan in Place?

Every time a project struggles or fails, it’s easy to point out some of the reasons why it happened, but it’s more difficult to see the core issues responsible. While the common reasons for failure are all too familiar, they all stem from one main problem: no project management planning.

According to the Project Management Institute, without a project management plan in place, your organization is far more likely to see projects fail than a company with a process to follow, and nearly half of all projects fail to meet the goals they set out to accomplish. Project failure is all too common in organizations, and even mature organizations can run into trouble, so the consequences of not having a project management plan in place are well-known and all too apparent. Here are four main ways your project can go wrong without a plan to manage them.

  1.    There can be a lack of organizational commitment and resources - How is your next project going to succeed if you don’t have the right team members to complete it, or the necessary buy-in from your CEO to gain the support required? With no organizational support in place to drive success, and no plan to obtain the dedicated team members you need to contribute, your project is unlikely to gain the resources you need to reach the goal. A project management plan will align the vision of the project with the organization and clearly outline the desired outcome and the resources needed to accomplish it.
  1.    You could deal with unrealistic or missed deadlines - Without a project management plan, you can successfully paint the vision for your project and then suddenly be dealing with impossible deadlines from stakeholders eager to see results without understanding the process. Even more often, a project poorly managed results in a lack of focus from team members working on it, without deadlines to know when their contribution is expected. This can stall projects and lead to pushed or missed deadlines. A project management plan gives visibility to leadership and helps them understand when to expect project completion and provides your team the timeline that helps move your project forward to an on-time (or early!) delivery.
  1.    Missed opportunity for standardized planning and leadership - Even when your team is talented and aligned with the goal of the project, everyone often works in different ways and needs different things from a manager to be successful. Having the right people working on your project isn’t enough when they aren’t working in harmony to handover their piece to the next person the right way. Without a plan to drive the project forward, there is no agreement between the manager and team on the process, timeline, and big picture of the project. Aligning your team and project with a standardized plan on Day 1 will help prevent these challenges with deliverables, roles, and responsibilities.
  1.    Significant damage to budgets, employee engagement, and overall morale - The cost of failure on a project can be an additional 1/3 of the project budget, but the cost to your team can damage your organization more than the bottom line. When 2/3 of employees already say they would quit if they feel underappreciated, missing opportunities to help your team see direct contributions and their overall purpose in your organization will hurt you far beyond a single project. These failures reflect on the team, on the manager, and in the leadership and damages engagement, morale, and results for everyone. Go in with a real plan and protect your budget, project, and most importantly, your team.

Without a structured project management plan that provides clarity, commitment, and confidence for everyone involved, your organization is inviting these potential pitfalls to potentially destroy your next project. Implementing a project management plan won’t happen overnight and will take time, energy, and buy-in from your team. But investing in that growth will help fortify your team against these issues and improve your chances of success on every project you work on, and can reinforce an environment of precision and excellence throughout the entire organization.

The cost of dedicating resources to meaningful project management is far less than the cost that repeated project failure has on your opportunities, innovation, customers, team morale, and bottom line. Create a project management plan and your organization will be laying the foundation for short and long term success that will make your projects easier, faster, more efficient, and more effective.

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