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Negotiating for resources In Project Management

In most organizations, project management is viewed as multiple-boss reporting. It is possible for the employees to report to one line manager and several project managers at the same time. This multiple boss reporting problem can greatly influence the way that the project manager negotiates for resources. Project managers must understand the skill level needed to perform the work, whether the resource would be needed on a part-time or full-time basis, and the duration of the effort for this worker.

Some people argue that today’s project managers no longer have a command of technology but possess more of an understanding of technology. If this is, in fact, the case, then the project managers might be better off negotiating for deliverables than for people. The argument is whether a project manager should manage people or manage deliverables.

Ducor Chemical

In the fall of 2000, Ducor Chemical received a research and development contract from one of their most important clients. The client had awarded Ducor with a twelve-month, sole-source contract for the R&D effort to create a new chemical that the client required for one of its future products. If Ducor could develop the product, the long-term production contract that would follow could generate significant profits over the next several years.

In addition to various lab personnel who would be used as needed, the contract mandated that a senior chemist be assigned for the duration of the project. In the past, the senior chemists had been used mainly for internal rather than external customer projects. This would be the first time a senior chemist had been assigned to this client. With only four senior chemists on staff, the project manager expected the resource negotiation process with the lab manager to be an easy undertaking.

Project manager: “I understand you’ve already looked over the technical requirements, so you should understand the necessity for assigning your best senior scientist.”

Lab manager: “All of my senior scientists are good. Any one of them can do the job. Based upon the timing of your project, I have decided to assign John Thornton.”

Project manager: “Just my luck! You assigned the only one I cannot work with effectively. I have had the misfortune of working with him before. He’s extremely arrogant and unpleasant to work with.”

Lab manager: “Perhaps so, but he got the job done, didn’t he?”

Project manager: “Yes, he did. Technically, he is capable. However, his arrogant attitude and sarcasm produced a demoralizing atmosphere for my team. That project was about three months in length. This project is at least a year. Also, if follow-on work is generated, as I expect it to be, I’ll be stuck with him for a long time. That’s unacceptable to me.”

Lab manager: “I’ll talk to John and see if I can put a gag in his mouth. Anyway, you’re a good project manager and you should know how to work with these technical and scientific prima donnas.”

Project manager: “I’ll never be able to maintain my sanity having to work with him full-time for at least one year. Surely you can assign one of the other three senior chemists instead.”

Lab manager: “Because of the nature of the other projects I have, John is the only senior chemist I can release for one full year. If your project were two or three months, then I might be able to give you one of the other senior chemists.”

Project manager: “I feel like you are dumping Thornton on me without considering what is in the best interest of the project. Perhaps we should have the sponsor resolve this conflict.”

Lab manager: “First of all, this is not a conflict. Second, threatening me with sponsor intervention will not help your case. Do you plan on asking for my resources or support ever again in the future? I’m like an elephant. I have a long memory. Third, my responsibility is to meet your deliverable in a manner that is in the best interest of the company.

“Try to look at resource assignments through my eyes. You’re worried about the best interest of your project. I have to support some twenty projects and must make decisions in the best interest of the entire company. Benefiting one project at the expense of several other projects is not a good company decision. And I am paid to make sound company decisions, whereas you are paid to make a project decision.”

Project manager: “My salary, promotion, and future opportunities rest solely on the success of this one project, not twenty.”

Lab manager: “Our relationship must be a partnership based upon trust if project management is to succeed. You must trust me when I tell you that your deliverables will be accomplished within time, cost, and quality. It’s my job to make that promise and to see that it is kept.”

Project manager: “But what about morale? That should also be a factor. There is also another important consideration. The customer wants monthly team meetings, at our location, to assess progress.”

Lab manager: “I know that. I read the requirements document. Why are the monthly meetings a problem?”

Project manager: “I have worked with this customer before. At the team meetings, they want to hear the technical status from the people doing the work rather than from the project manager. That means that John Thornton would be directly interfacing with the customer at least once a month. Thornton is a ‘loose cannon,’ and there’s no telling what words will come out of his mouth. If it were not for the interface meetings, I might be agreeable to accept Thornton. But based upon previous experience, he simply does not know when to shut up! He could cause irrevocable damage to our project.”

Lab manager: “I will take care of John Thornton. And to appease you, I will also attend each one of the customer interface meetings to keep Thornton in line. As far as I’m concerned, Thornton will be assigned and the subject is officially closed!”

THE PROJECT CONTINUED . . .

John Thornton was assigned to the project team. During the second interface meeting, Thornton stood up and complained to the customer that some of the tests that the customer had requested were worthless, serving no viable purpose. Furthermore, Thornton asserted that if he were left alone, he could develop a product far superior to what the customer had requested.

The customer was furious over Thornton’s remarks and asserted that they would now evaluate the project performance to date, as well as Ducor’s commitment to the project. After the evaluation they would consider whether the project should be terminated, or perhaps assigned to one of Ducor’s competitors. The lab manager had not been present during either of the first two customer interface meetings.

QUESTIONS

  1. How do we create a partnership between the project manager and line managers when project manager focuses only on the best interest of his/her project and the line manager is expected to make impartial company decisions?
  1. Who should have more of a say during negotiations for resources: the projectmanager or the line manager?
  2. How should irresolvable conflicts over staffing between the project and linemanagers be handled?
  3. Should an external customer have a say in project staffing?
  4. How do we remove an employee who is not performing as expected?
  5. Should project managers negotiate for people or deliverables?

American Electronics International

On February 13, 2004, American Electronics International (AEI) was awarded a $30 million contract for R&D and production qualification for an advanced type of guidance system. During an experimental program that preceded this award and was funded by the same agency, AEI identified new materials with advanced capabilities, which could easily replace existing field units. The program, entitled The Mask Project, would be thirty months in length, requiring the testing of fifteen units. The Mask Project was longer than any other project that AEI had ever encountered. AEI personnel were now concerned about what kind of staffing problems there would be.

BACKGROUND

In June 2002, AEI won a one-year research project for new material development. Blen Carty was chosen as project manager. He had twenty-five years of experience with the company in both project management and project engineering positions. During the past five years Blen had successfully performed as the project manager on R&D projects.

AEI used the matrix approach to structuring project management. Blen was well aware of the problems that can be encountered with this organizational form.

When it became apparent that a follow-on contract would be available, Blen felt that functional managers would be reluctant to assign key personnel full-time to his project and lose their services for thirty months. Likewise, difficulties could be expected in staffing the project office.

During the proposal stage of the Mask Project, a meeting was held with Blen Carty, John Wallace, the director of project management, and Dr. Albert Runnels, the director of engineering. The purpose of the meeting was to satisfy a customer requirement that all key project members be identified in the management volume of the proposal.

John Wallace: “I’m a little reluctant to make any firm commitment. By the time your program gets off the ground, four of our other projects are terminating, as well as several new projects starting up. I think it’s a little early to make firm selections.”

Blen Carty: “But we have a proposal requirement. Thirty months is a long time to assign personnel for. We should consider this problem now.”

Dr. Runnels: “Let’s put the names of our top people into the proposal. We’ll add several Ph.D.s from our engineering community. That should beef up our management volume. As soon as we’re notified of contract go-ahead, we’ll see who’s available and make the necessary assignments. This is a common practice in the industry.”

COMPLETION OF THE MATERIAL DEVELOPMENT PROJECT

The material development program was a total success. From its inception, everything went smoothly. Blen staffed the project office with Richard Flag, a Ph.D. in engineering, to serve as project engineer. This was a risky move at first, because Richard had been a research scientist during his previous four years with the company. During the development project, however, Richard demonstrated that he could divorce himself from R&D and perform the necessary functions of a project engineer assigned to the project office. Blen was pleased with the way that Richard controlled project costs and directed activities.

Richard had developed excellent working relations with development lab personnel and managers. Richard permitted lab personnel to work at their own rate of speed provided that schedule dates were kept. Richard spent ten minutes each week with each of the department managers informing them of the status of the project. The department managers liked this approach because they received firsthand (nonfiltered) information concerning the total picture, not necessarily on their own activities, and because they did not have to spend “wasted hours” in team meetings.

When it became evident that a follow-up contract might be available, Blen spent a large percentage of his time traveling to the customer, working out the details for future business. Richard then served as both project manager and project engineer.

The customer’s project office was quite pleased with Richard’s work. Information, both good and bad, was transmitted as soon as it became available. Nothing was hidden or disguised. Richard became familiar with all of the customer’s project office personnel through the monthly technical interchange meetings.

At completion of the material development project, Blen and John decided to search for project office personnel and make recommendations to upper-level management. Blen wanted to keep Richard on board as chief project engineer. He would be assigned six engineers and would have to control all engineering activities within time, cost, and performance. Although this would be a new experience for him, Blen felt that he could easily handle it.

Unfortunately, the grapevine was saying that Larry Gilbert was going to be assigned as chief project engineer for the Mask Project.

SELECTION PROBLEMS

On November 15, Dr. Runnels and Blen Carty had a meeting to select the key members of the project team.

Dr. Runnels: “Well, Blen, the time has come to decide on your staff. I want to assign Larry Gilbert as chief engineer. He’s a good man and has fifteen years’ experience. What are your feelings on that?”

Blen Carty: “I was hoping to keep Richard Flag on. He has performed well, and the customer likes working with him.”

Dr. Runnels: “Richard does not have the experience necessary for that position. We can still assign him to Larry Gilbert and keep him in the project office.”

Blen Carty: “I’d like to have Larry Gilbert working for Richard Flag, but I don’t suppose that we’d ever get approval to have a grade-9 engineer working for a grade-7 engineer. Personally, I’m worried about Gilbert’s ability to work with people. He has been so regimented in his ways that our people in the functional units have refused to work with him. He treats them as kids, always walking around with a big stick. One department manager said that if Gilbert becomes the boss, then it will probably result in cutting the umbilical cord between the project office and his department. His people refuse to work for a dictator. I have heard the same from other managers.”

Dr. Runnels: “Gilbert gets the job done. You’ll have to teach him how to be a Theory Y manager. You know, Blen, we don’t have very many grade-9 engineering positions in this company. I think we should have a responsibility to our employees. I can’t demote Gilbert into a lower slot. If I were to promote Flag, and the project gets canceled, where would I reassign him? He can’t go back to functional engineering. That would be a step down.”

Blen Carty: “But Gilbert is so set in his ways. He’s just totally inflexible. In addition, thirty months is a long time to maintain a project office. If he screws up we’ll never be able to replace positions in time without totally upsetting the customer. There seem to be an awful lot of people volunteering to work on the Mask Project. Is there anyone else available?”

Dr. Runnels: “People always volunteer for long-duration projects because it gives them a feeling of security. This even occurs among our dedicated personnel. Unfortunately we have no other grade-9 engineers available. We could reassign one from another program, but I hate to do it. Our engineers like to carry a project through from start to finish. I think you had better spend some time with the functional managers making sure that you get good people.”

Blen Carty: “I’ve tried that and am having trouble. The functional managers will not surrender their key people full-time for thirty months. One manager wants to assign two employees to our project so that they can get on-the-job training. I told him that this project is considered as strategic by our management and that we must have good people. The manager just laughed at me and walked away.”

Dr. Runnels: “You know, Blen, you cannot have all top people. Our other projects must be manned. Also, if you were to use all seasoned veterans, the cost would exceed what we put into the proposal. You’re just going to have to make do with what you can get. Prepare a list of the people you want and I’ll see what I can do.”

As Blen left the office, he wondered if Dr. Runnels would help him in obtaining key personnel.

QUESTIONS

  1. Whose responsibility is it to staff the office?
  2. What should be Blen Carty’s role, as well as that of Dr. Runnels?
  3. Should Larry Gilbert be assigned?
  4. How would you negotiate with the functional managers?

The Carlson Project

“I sympathize with your problems, Frank,” stated Joe McGee, manager of project managers. “You know as well as I do that I’m supposed to resolve conflicts and coordinate efforts among all projects. Staffing problems are your responsibility.”

Frank: “Royce Williams has a resume that would choke a horse. I don’t understand why he performs with a lazy, I-don’t-care attitude. He has fifteen years of experience in a project organizational structure, with ten of those years being in project offices. He knows the work that has to be done.”

McGee: “I don’t think that it has anything to do with you personally. This happens to some of our best workers sooner or later. You can’t expect guys to give 120 percent all of the time. Royce is at the top of his pay grade, and being an exempt employee, he doesn’t get paid for overtime. He’ll snap out of it sooner or later.”

Frank: “I have deadlines to meet on the Carlson Project. Fortunately, the Carlson Project is big enough that I can maintain a full-time project office staff of eight employees, not counting myself.

“I like to have all project office employees assigned full-time and qualified in two or three project office areas. It’s a good thing that I have someone else checked out in Royce’s area. But I just can’t keep asking this other guy to do his own work and that of Royce’s. This poor guy has been working sixty to seventy hours a week and Royce has been doing only forty. That seems unfair to me.”

McGee: “Look, Frank, I have the authority to fire him, but I’m not going to. It doesn’t look good if we fire somebody because they won’t work free overtime. Last year we had a case similar to this, where an employee refused to work on Monday and Wednesday evenings because it interfered with his MBA classes. Everyone knew he was going to resign the instant he finished his degree, and yet there was nothing that I could do.”

Frank: “There must be other alternatives for Royce Williams. I’ve talked to him as well as to other project office members. Royce’s attitude doesn’t appear to be demoralizing the other members, but it easily could in a short period of time.”

McGee: “We can reassign him to another project, as soon as one comes along. I’m not going to put him on my overhead budget. Your project can support him for the time being. You know, Frank, the grapevine will know the reason for his transfer. This might affect your ability to get qualified people to volunteer to work with you on future projects. Give Royce a little time and see if you can work it out with him. What about this guy, Harlan Green, from one of the functional groups?”

Frank: “Two months ago, we hired Gus Johnson, a man with ten years of experience. For the first two weeks that he was assigned to my project, he worked like hell and got the work done ahead of schedule. His work was flawless. That was the main reason why I wanted him. I know him personally, and he’s one great worker.

“During weeks three and four, his work slowed down considerably. I chatted with him and he said that Harlan Green refused to work with him if he kept up that pace.”

McGee: “Did you ask him why?”

Frank: “Yes. First of all, you should know that for safety reasons, all men in that department must work in two- or three-men crews. Therefore, Gus was not allowed to work alone. Harlan did not want to change the standards of performance for fear that some of the other employees would be laid off.

“By the end of the first week, nobody in the department would talk to Gus. As a matter of fact, they wouldn’t even sit with him in the cafeteria. So, Gus had to either conform to the group or remain an outcast. I feel partially responsible for what has happened, since I’m the one who brought him here.

“I know that has happened before, in the same department. I haven’t had a chance to talk to the department manager as yet. I have an appointment to see him next week.”

McGee: “There are solutions to the problem, simple ones at that. But, again, it’s not my responsibility. You can work it out with the department manager.”

“Yeah,” thought Frank. “But what if we can’t agree?”

Communication Failures

BACKGROUND

Herb had been with the company for more than eight years and had worked on various R&D and product enhancement projects for external clients. He had a Ph.D. in engineering and had developed a reputation as a subject matter expert. Because of his specialized skills, he worked by himself most of the time and interfaced with the various project teams only during project team meetings. All of that was about to change.

Herb’s company had just won a two-year contract from one of its best customers. The first year of the contract would be R&D and the second year would be manufacturing. The company made the decision that the best person qualified to be the project manager was Herb because of his knowledge of R&D and manufacturing. Unfortunately, Herb had never taken any courses in project management, and because of his limited involvement with previous project teams, there were risks in assigning him as the project manager. But management believed he could do the job.

©2010 by Harold Kerzner. Reproduced by permission. All rights reserved.

THE TEAM IS FORMED

Herb’s team consisted of fourteen people, most of whom would be full time for at least the first year of the project. The four people that Herb would be interfacing with on a daily basis were Alice, Bob, Betty, and Frank.

  • Alice was a seasoned veteran who worked with Herb in R&D. Alice had been with the company longer than Herb and would coordinate the efforts of the R&D personnel.
  • Bob also had been with the company longer that Herb and had spent his career in engineering. Bob would coordinate the engineering efforts and drafting.
  • Betty was relatively new to the company. She would be responsible for all reports, records management, and procurements.
  • Frank, a five-year employee with the company, was a manufacturing engineer. Unlike Alice, Bob, and Betty, Frank would be part time on the project until it was time to prepare the manufacturing plans.

For the first two months of the program, work seemed to be progressing as planned. Everyone understood their role on the project and there were no critical issues.

FRIDAY THE 13TH

Herb held weekly teams meetings every Friday from 2:00 to 3:00 p.m. Unfortunately the next team meeting would fall on Friday the 13th, and that bothered Herb because he was somewhat superstitious. He was considering canceling the team meeting just for that week but decided against it.

At 9:00 a.m., on Friday the 13th, Herb met with his project sponsor as he always did in the past. Two days before, Herb casually talked to his sponsor in the hallway and the sponsor told Herb that on Friday the sponsor would like to discuss the cash flow projections for the next six months and have a discussion on ways to reduce some of the expenditures. The sponsor had seen some expenditures that bothered him. As soon as Herb entered the sponsor’s office, the sponsor said:

It looks like you have no report with you. I specifically recall asking you for a report on the cash flow projections.

Herb was somewhat displeased over this. Herb specifically recalled that this was to be a discussion only and no report was requested. But Herb knew that Friday the 13th

“rank has its privileges” and questioning the sponsor’s communication skills would be wrong. Obviously, this was not a good start to Friday the 13th.

At 10:00 a.m., Alice came into Herb’s office and he could see from the expression on her face that she was somewhat distraught. Alice then spoke:

Herb, last Monday I told you that the company was considering me for promotion and the announcements would be made this morning. Well, I did not get promoted. How come you never wrote a letter of recommendation for me?

Herb remembered the conversation vividly. Alice did say that she was being considered for promotion but never asked him to write a letter of recommendation. Did Alice expect Herb to read between the lines and try to figure out what she really meant?

Herb expressed his sincere apologies for what happened. Unfortunately, this did not make Alice feel any better as she stormed out of Herb’s office. Obviously, Herb’s day was getting worse and it was Friday the 13th.

No sooner had Alice exited the doorway to Herb’s office when Bob entered. Herb could tell that Bob had a problem. Bob then stated:

In one of our team meetings last[B1] month, you stated that you had personally contacted some of my engineering technicians and told them to perform this week’s tests at 70°F, 90°F and 110°F. You and I know that the specifications called for testing at 60°F, 80°F and 100°F. That’s the way it was always done and you were asking them to perform the tests at different intervals than the specifications called for.

Well, it seems that the engineering technicians forgot the conversation you had with them and did the tests according to the specification criteria. I assumed that you had followed up your conversation with them with a memo, but that was not the case. It seems that they forgot.

When dealing with my engineering technicians, the standard rule is, “if it’s not in writing, then it hasn’t been said.” From now on, I would recommend that you let me provide the direction to my engineering technicians. My responsibility is engineering and all requests of my engineering personnel should go through me.

Yes, Friday the 13th had become a very bad day for Herb. What else could go wrong, Herb thought? It was now 11:30 a.m. and almost time for lunch. Herb was considering locking his office door so that nobody could find him and then disconnecting his phone. But in walked Betty and Frank, and once again he could tell by the expressions on their faces that they had a problem. Frank spoke first:

I just received confirmation from procurement that they purchased certain materials which we will need when we begin manufacturing. We are a year away from beginning manufacturing and, if the final design changes in the slightest, we will be stuck with costly raw materials that cannot be used. Also, my manufacturing budget did not have the cash flow for early procurement. I should be involved in all procurement decisions involving manufacturing. I might have been able to get it cheaper that Betty did. So, how was this decision made without me?

Before Herb could say anything, Betty spoke up:

Last month, Herb, you asked me to look into the cost of procuring these materials. I found a great price at one of the vendors and made the decision to purchase them. I thought that this was what you wanted me to do. This is how we did it in the last company I worked for.

Herb then remarked:

I just wanted you to determine what the cost would be, not to make the final procurement decision, which is not your responsibility.

Friday the 13th was becoming possibly the worst day in Herb’s life. Herb decided not to take any further chances. As soon as Betty and Frank left, Herb immediately sent out e-mails to all of the team members canceling the team meeting scheduled for 2:00 to 3:00 p.m. that afternoon.

QUESTIONS

  1. How important are communication skills in project management?
  2. Was Herb the right person to be assigned as the project manager?
  3. There were communications issues with Alice, Bob, Betty, and Frank. Foreach communication issue, where was the breakdown in communications: encoding, decoding, feedback, and so on?

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