Management

Thursday, February 3, 2011

Chaos Theory: The Uncontrollable Factor in the Development of Management Systems

Failures in project management systems can be superficially explained by anything from a lack of project detail to managerial conflicts. However, this failure often has deeper roots. Until we begin to recognize this uncontrollable factor it will be difficult to master the implementation of any management system. This factor is known as the "Chaos Theory" or simply "chaos". Chaos Theory could be considered a core management theory for the 21st century. According to Wheatley (1992) when management tries to control chaos by "shoehorning" it into a specific structure, an organization is bound to fail. Controlling chaos this rigidly is actually limiting information gathering (Stuart, 1995) and creating the illusion of management. According to McNamara (1999), Chaos Theory recognizes that events are rarely controlled. As systems such as those in management grow in complexity, the more they become volatile or susceptible to cataclysmic events.

One way to plan for such chaos is through "contingency management". Contingency management is having an alternative plan to fall back on when chaos strikes, allowing for critical internal processes to continue and meet the desired outcome. Most managers do not see contingency management as a necessary step, because it takes time. In a world where efficiency and timeliness is key, this step is often the first to be overlooked. Until management recognizes the importance of contingency management and allows it to be fully implemented, chaos will continue to hinder the progress and efficiency of management systems.

DEFINING AND ESTIMATING CHAOS

The more general name for the field is complexity theory, where chaos is a particular mode of behavior (Rosenhead, 1998). Chaos theory explains that the behavior in turbulent systems quickly becomes disordered (Wikipedia, 2005). Chaos theory acknowledges that management systems break down. It recognizes that decisions need to be made even in the absence of all intended information (Herz, 2001). Complete order, while the ideal, will always be the one unaccounted for variable--part of our human nature. Similar to accidents, chaos is like a release of energy in an uncontrolled way (Blockley, 1998).

Project management systems are considered dynamic systems, similar to those in nature, which means they change over time and are hard to predict. Even though they are changing, there is usually an underlying predictability that can be identified. This is where chaotic behavior comes into play. Behavior in systems can be placed into two zones, one, the stable zone, where the system, if disturbed, returns to its initial state and two, the zone of instability where some small activity leads to further divergence (Rosenhead, 1998).

CALCULATING CHAOS

Chaos is immeasurable because of its level of randomness and unpredictability. Gabriel (1996) states that looking for sufficient equations to enable one to 'manage' such chaos is part of a futile and wish-fulfilling quest. However there are some researchers that believe calculating chaos is possible. While chaos in the business world mimics that in nature, unlike chaos in nature, there are measurable ways for project managers to try and calculate the degree to which chaos will affect their project. The following formula can help to calculate project constraints:

Dynamics = D + a*P + b*R + c*D*P + d*P*R + e*R*D + f*D*P*R

Where D=directives, P=prerequisites, R=resources and a & f are constraints.

However Bertelsen and Koskela (2003) postulate that aside from estimating the size of the chaos (small to extra large), a system is too complicated to predict its function and response to a given problem.

WHY IS BUSINESS SO CHAOTIC?

The pace of today's businesses and technological innovations have quickened to an impossible pace. Sometimes project timelines need to be written before all tasks and resources have been completely identified, which puts a project behind schedule before it has begun. This increasingly fast-paced system is "a breeding ground" for a chaotic management system (Yoke, 2003).

This breeding ground is creating a complexity explosion, which is affecting the way project managers need to manage. Undertaking a management system project is more than a weeklong project--many last for years or longer. As conditions are constantly changing, goals and objectives need to also be flexible to change. Goals and objectives are necessary, however, flexibility is key in order to ensure positive long-term results of a project.

HOW TO MANAGE CHAOS

The first line of defense in order to manage chaos is a good management team and an even better project manager. According to Bertelsen & Koskela (2003) an organization can manage its chaos by seeking out the factors that are easiest to change. An organization should then handle a projects dynamics and stress in the face of uncertainties. Finally, a manager should both always have a contingency plan and be able to keep track of critical factors and issue warnings. By turning an organization into a "learning organization" successful management of chaos is more likely (Bertelsen & Koskela, 2003).

Systems are so dynamically complex and highly sensitive to conditions that any link between cause and effect can set off a ripple effect rendering its future deliverable unpredictable. Technologies, timelines, scope, costs, personnel, are constantly changing within an organization and management must be adaptable. The same holds true for project managers. If they are not given the flexibility to adapt to chaos then management systems will fail. Project managers need to be seen as venture capitalists: always searching for new ideas.

Most management systems set forth a detailed plan and than proceed to follow it. According to McNamara the best way to do this is to work backwards through the system of an organization. This will help to show which processes will produce the right output and what inputs are required to conduct those processes (McNamara, 1999). A good project manager is one who realizes that plans often need to change in order to accommodate a changing situation. By following contingency plans, good managers can avoid such mishaps as scope creep and cost overruns.
There are different tools that project managers can use to help manage the chaos and successfully manage complicated systems. According to the Numbers Group some such tools are:

1. Work Breakdown Structure (WBS) - breaks the product to be developed or produced by hardware, software, support, or service element and relates the scope to each.
Example of WBS

2. Program Evaluation and Review (PERT) - a model, which helps the project manager define the critical path using, randomized tasks
Example of Pert Chart

3. Implementation Schedule (GANTT) - graphical representation of the duration of tasks against the progression of time.

Example of Gantt Chart

4. Enneagram - originally a tool for personality mapping, can find order in chaos by identifying underlying patterns in an organization. The map allows project managers to predict certain outcomes, which results in more reliable management systems. The Enneagram provides a structured view with which to see the order in between chaos (Fowlke & Fowlke, 1997).
Example of an Enneagram

CONCLUSION

A good project manager is one who can adapt to a changing environment as well as allow individuals to manage their own areas of expertise. This business trend is seen in forward thinking companies in the 21st century, and is also known as "managing by objectives" or "empowering knowledge workers". Unfortunately, in most companies this value paradigm is missed because management is focused on the financials rather than on renewing and developing knowledge (Stuart, 1995).

The project manager's main function is to recognize employees' strengths and to empower his group to work individually, both in a team and as individuals. The new project manager needs to be forward thinking and to have the ability to be flexible, creative, and able to respond to events quickly (Yolk 2003). Organizations need to embrace disorder and look to the edge of chaos (Stuart, 1995). Perhaps this empowerment of both individuals and teams as a whole, in conjunction with managements' ability to stay nimble in the face of a dramatically changing environment, will allow organizations to better manage the challenge of chaos in the 21st century.

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Retail Operations - Effective Branch Manager Support and Guidance

Performance and behaviour management is by far the most difficult aspect of any manager's job and the reluctance to 'grasp the nettle' when performance or behaviour issues emerge is certainly a concern in many organisations. But at the end of the day that is what managers are paid to do and not doing so will certainly affect service, team morale, sales and ultimately the bottom line.

Why does this reluctance exist, why do so many mangers back away from confrontation? The problems and challenges that need to be overcome are many and the common reasons and 'excuses' for not doing so are as follows:

It is Risky - There is a worry in the back of the manager's mind that discussions could turn into heated arguments and that they may open themselves up for harassment or bullying accusations. There is also a concern that team moral and motivation may be damaged by tackling an under-performer and that the team may even turn against the manager.

It is Complicated and Difficult- Performance and behaviour management is not straight forward, it is very seldom clear cut or black and white. It is 'grey area' stuff and often involves opinions, perceptions and subjectivity. As managers feel they cannot quantify and then justify their concerns clearly enough they do not attempt to do so.

It is Hard Work and Time Consuming - Many managers feel they do not have the time to sort out under-performers and that it is low on the priority list. "It is not worth the hassle" is a common comment to be heard.

Denial - Many managers are either blind to the fact that a person is under-performing or behaving unacceptably or they do not see it is a serious enough issue to address. There are even managers who believe that it is not their job to tackle performance and behaviour issues and that some day, someone will come along and do it for them.

Many of the aforementioned points tend to be excuses rather than reasons but there are a number of more important points that need to be taken into consideration:

Lack of Training - No new manager has any previous experience of performance and behaviour issues when they move into a manager role for the first time. New managers often inherit performance or behaviour issues from the previous manager and yet are not given relevant training for tackling these issues from the onset. Giving managers basic employment law training and the company procedures to read is not the 'practical' training they need and is certainly insufficient on its own. All managers need a thorough grounding in the use of the performance management tools and practice in their use. Job specs, probationary periods, reviews, counselling sessions, appraisals and the disciplinary procedures are all useful performance and behaviour tools when used correctly and at the right time. Yet this vital training is not made on someone's appointment, often it is made later in their careers when much damage has been done.

Courage and Confidence - Doing something risky, difficult and complicated requires both courage and confidence. Unfortunately many branch managers lack both. Even if managers are given the knowledge and skill to tackle performance or behaviour issues, they will not do so without these essential qualities.

The problems and challenges are undoubtedly great and many may see the issue as un-resolvable however there is someone available to branch managers who can help them overcome many of the problems and challenges and that someone is their boss the Area Manager.

Guidance, Coaching and Support
The area manger is the only person who can guide, coach and support branch managers in the addressing of performance or behaviour issues. They can un-complicate the issues and help managers build a strong case for presenting to an employee. The area manager can also help the manager minimise the risk of harassment or bullying claims by ensuring the correct procedures are being used and that the managers say the right things in the correct way.

More importantly a good area manager will 'encourage' and give the manager much needed confidence. The area manager is the only one who can do this but unfortunately in many instances this is not happening and by not doing so area managers are unconsciously (or consciously) influencing a reluctance to tackle performance or behaviour issues within their branches.

Why is this happening?

Asking for support and guidance - Many branch managers are certainly reluctant to approach their area manager when they experience performance or behaviour issues within the team. If the matter falls into the gross misconduct category then managers will contact the area manager (and HR function) in the first instance. But for 'grey area' performance or behaviour matters they tend to keep the issues to themselves.
The reasons for this are as follows:

Many branch managers feel:

* The area manager may see it as a trivial matter and not important enough to bring to their attention.

* That seeking advice and guidance will be seen in a negative way by the area manager.

* The area manager will go into fault finding mode rather than helping find solutions.

* The area manager may start questioning the branch manager's ability to do the job.

Many managers have in the past gone to their area mangers for advice and support on team performance issues but received such a negative, unhelpful reply that many were put off from ever doing so again, even when they changed to a different area manager.

There is also a feeling that area managers themselves do not know what to do either. "Bring me solutions not problems" is a common comment heard by branch managers when they have taken a 'people' issue to their area manager.

Offering support and guidance

It is a fact that very few area managers actively encourage branch managers to talk about their 'people' issues or are prepared to probe below the surface to identify possible performance or behaviour problems that may be affecting the business. There are many examples where area managers have placed managers in 'problem' branches without preparing them for the issues they will face or helped or supported them once they have taken up the position. Basically they throw them to the wolves and then leave them to get on with it.

Another common issue is when the assistant manager of the branch is turned down for the manager position. Very few area managers are competent in explaining why an individual was not appointed and give excuses rather than valid reasons. This results in the new manager having to experience considerable hostility and resentment from not only their deputy but from many of the team also.

Why do many area managers not offer support or guidance or dig below the surface looking for performance issues? There are a number of reasons for this.

Unconscious Competence

There is a saying that "Good Management will result in good people staying and not-so-good people either improving or leaving. Where as Bad Management will result in good people leaving and not-so-good people staying and possibly getting even worse".

During their time as branch managers, many area managers did not experience risky, difficult or complicated people issues. If they did, they often resolved them unconsciously. They just acted as good managers should, which resulted in the issues being resolved quickly. Ask any manager who is competent in performance or behaviour management "how do you do it or what do you do?" and you will probably receive a shrug of the shoulders and a comment like "I don't know specifically, I just do it" (Unconscious Competence)

Unconscious competence is not acceptable at area management level as a key requirement of the job is to coach and train branch managers in performance management. Area managers can only fulfil this critical function if they know exactly what is to be done and how to do it. (Conscious competence)

Conscious Incompetence

Unfortunately there are area managers in existence who 'know' they are not personally competent in dealing with performance and behaviour issues and will go to great lengths not to expose this weakness to others. (Conscious incompetence) These area managers tend to encourage branch managers to not make waves, maintaining the status quo and to tolerate rather than develop. They certainly do not dig below the surface in a branch seeking 'people' issues that may be affecting the business.

One of the most disappointing comments I heard from a seasoned area manager when asked why he was not supporting his managers was "I am not allowed to get involved as I am the next step of the appeal process".

A good measure of an area manager's competence is to look at the performance and behaviour of the area manager's branch manager team. It is pretty certain that if they cannot coach and encourage branch mangers in the tackling of performance and behaviour issues then you can be sure they themselves are not tackling branch manager performance or behaviour issues.

Possible Solutions

If a retail organisation needs to tackle performance or behaviour issues at branch levels, I believe they need to develop the skills and competence of performance management at area management level first as area managers alone have the authority and are the biggest influence on branch manager effectiveness.

Unconscious competent area managers need to become consciously competent so they can not only develop others but also develop themselves further. Conscious incompetent area managers need to admit that they are not effective in performance or behaviour management and be prepared to learn and develop the necessary skills. If they are not prepared to do so then they themselves need to be performance managed by the company. After all, Executives cannot demand that branch managers tackle performance and behaviour issues one moment and then not do so themselves when they need to. That isn't leading by example

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The Importance of Project Closeout and Review in Project Management.

The well known English phrase "last but not least" could not better describe how important the project closeout phase is. Being the very last part of the project life-cycle it is often ignored even by large organizations, especially when they operate in multi-project environments. They tend to jump from one project to another and rush into finishing each project because time is pressing and resources are costly. Then projects keep failing and organizations take no corrective actions, simply because they do not have the time to think about what went wrong and what should be fixed next time. Lessons learned can be discussed at project reviews as part of the closeout phase. Closure also deals with the final details of the project and provides a normal ending for all procedures, including the delivery of the final product. This paper identifies the reasons that closeout is neglected, analyzes the best practices that could enhance its position within the business environment and suggest additional steps for a complete project closeout through continuous improvement.

Project managers often know when to finish a projects but they forget how to do it. They are so eager to complete a project that they hardly miss the completion indicators. "Ideally, the project ends when the project goal has been achieved and is ready to hand over to customer" (Wellace et. al, 2004, p156). In times of big booms and bubbles, senior management could order the immediate termination of costly projects. A characteristic example of that is Bangkok's over investment in construction of sky-scrapers, where most of them left abandoned without finishing the last floors due to enormous costs (Tvede, 2001, p267). Projects heavily attached to time can be terminated before normal finishing point if they miss a critical deadline, such as an invitation to tender. Kerzner (2001, p594) adds some behavioural reasons for early termination such as "poor morale, human relations or labour productivity". The violent nature of early termination is also known as 'killing a project' because it "involves serious career and economic consequences" (Futrel, Shafer D & Shafer L, 2002, 1078). Killing a project can be a difficult decision since emotional issues create pride within an organization and a fear of being viewed as quitters blurs managerial decisions (Heerkens, 2002, p229).

Recognition

The most direct reason that Project Closeout phase is neglected is lack of resources, time and budget. Even though most of project-based organizations have a review process formally planned, most of the times "given the pressure of work, project team member found themselves being assigned to new projects as soon as a current project is completed" (Newell, 2004). Moreover, the senior management often considers the cost of project closeout unnecessary. Sowards (2005) implies this added cost as an effort "in planning, holding and documenting effective post project reviews". He draws a parallel between reviews and investments because both require a start-up expenditure but they can also pay dividends in the future.

Human nature avoids accountability for serious defects. Therefore, members of project teams and especially the project manager who has the overall responsibility, will unsurprisingly avoid such a critique of their work if they can. As Kerzner (2001, p110) observe, "documenting successes is easy. Documenting mistakes is more troublesome because people do not want their names attached to mistakes for fear of retribution". Thomset (2002, p260) compares project reviews with the 'witch hunts' saying that they can be "one of the most political and cynical of all organizational practices where the victims (the project manager and the team) are blamed by senior management". While he identifies top management as the main responsible party for a failure, Murray (2001) suggest that the project manager "must accept ultimate responsibility, regardless of the factors involved". A fair-minded stance on these different viewpoints would evoke that the purpose of the project review is not to find a scapegoat but to learn from the mistakes. After all, "the only true project failures are those from which nothing is learned" (Kerzner, 2004, p303).

Analysis

When the project is finished, the closeout phase must be implemented as planned. "A general rule is that project closing should take no more than 2% of the total effort required for the project" (Crawford, 2002, p163). The project management literature has many different sets of actions for the last phase of the project life cycle. Maylor (2005, p345) groups the necessary activities into a six step procedure, which can differ depending on the size and the scope of the project:

1. Completion

First of all, the project manager must ensure the project is 100% complete. Young (2003, p256) noticed that in the closeout phase "it is quite common to find a number of outstanding minor tasks from early key stages still unfinished. They are not critical and have not impeded progress, yet they must be completed". Furthermore, some projects need continuing service and support even after they are finished, such as IT projects. While it is helpful when this demand is part of the original statement of requirements, it is often part of the contract closeout. Rosenau and Githens (2005, p300) suggest that "the contractor should view continuing service and support as an opportunity and not merely as an obligation" since they can both learn from each other by exchanging ideas.

2. Documentation
Mooz et. al (2003, p160) defines documentation as "any text or pictorial information that describe project deliverables". The importance of documentation is emphasized by Pinkerton (2003, p329) who notes that "it is imperative that everything learned during the project, from conception through initial operations, should be captured and become an asset". A detailed documentation will allow future changes to be made without extraordinary effort since all the aspects of the project are written down. Documentation is the key for well-organized change of the project owner, i.e. for a new investor that takes over the project after it is finished. Lecky-Thompson (2005, p26) makes a distinction between the documentation requirements of the internal and the external clients since the external party usually needs the documents for audit purposes only. Despite the uninteresting nature of documenting historical data, the person responsible for this task must engage actively with his assignment.

3. Project Systems Closure
All project systems must close down at the closeout phase. This includes the financial systems, i.e. all payments must be completed to external suppliers or providers and all work orders must terminate (Department of Veterans Affairs, 2004, p13). "In closing project files, the project manager should bring records up to date and make sure all original documents are in the project files and at one location" (Arora, 1995). Maylor (2005, 347) suggest that "a formal notice of closure should be issued to inform other staff and support systems that there are no further activities to be carried out or charges to be made". As a result, unnecessary charges can be avoided by unauthorized expenditure and clients will understand that they can not receive additional services at no cost.

4. Project Reviews
The project review comes usually comes after all the project systems are closed. It is a bridge that connects two projects that come one after another. Project reviews transfer not only tangible knowledge such as numerical data of cost and time but also the tacit knowledge which is hard to document. 'Know-how' and more important 'know-why' are passed on to future projects in order to eliminate the need for project managers to 'invent the wheel' from scratch every time they start a new project. The reuse of existing tools and experience can be expanded to different project teams of the same organization in order to enhance project results (Bucero, 2005). Reviews have a holistic nature which investigate the impact of the project on the environment as a whole. Audits can also be helpful but they are focused on the internal of the organization. Planning the reviews should include the appropriate time and place for the workshops and most important the people that will be invited. Choosing the right people for the review will enhance the value of the meeting and help the learning process while having an objective critique not only by the team members but also from a neutral external auditor. The outcome of this review should be a final report which will be presented to the senior management and the project sponsor. Whitten (2003) also notices that "often just preparing a review presentation forces a project team to think through and solve many of the problems publicly exposing the state of their work".

5. Disband the project team

Before reallocating the staff amongst other resources, closeout phase provides an excellent opportunity to assess the effort, the commitment and the results of each team member individually. Extra-ordinary performance should be complemented in public and symbolic rewards could be granted for innovation and creativity (Gannon, 1994). This process can be vital for team satisfaction and can improve commitment for future projects (Reed, 2001). Reviewing a project can be in the form of a reflective process, as illustrated in the next figure, where project managers "record and critically reflect upon their own work with the aim of improving their management skills and performance" (Loo, 2002). It can also be applied in problematic project teams in order to identify the roots of possible conflicts and bring them into an open discussion.

Ignoring the established point of view of disbanding the project team as soon as possible to avoid unnecessary overheads, Meredith and Mandel (2003, p660) imply that it's best to wait as much as you can for two main reasons. First it helps to minimize the frustration that might generate a team member's reassignment with unfavourable prospects. Second it keeps the interest and the professionalism of the team members high as it is common ground that during the closing stages, some slacking is likely to appear.

6. Stakeholder satisfaction

PMI's PMBoK (2004, p102) defines that "actions and activities are necessary to confirm that the project has met all the sponsor, customer and other stakeholders' requirements". Such actions can be a final presentation of the project review which includes all the important information that should be published to the stakeholders. This information can include a timeline showing the progress of the project from the beginning until the end, the milestones that were met or missed, the problems encountered and a brief financial presentation. A well prepared presentation which is focused on the strong aspects of the projects can cover some flaws from the stakeholders and make a failure look like an unexpected success.

Next Steps

Even when the client accepts the delivery of the final product or service with a formal sign-off (Dvir, 2005), the closeout phase should not be seen as an effort to get rid of a project. Instead, the key issue in this phase is "finding follow-up business development potential from the project deliverable" (Barkley & Saylor, 2001, p214). Thus, the project can produce valuable customer partnerships that will expand the business opportunities of the organization. Being the last phase, the project closeout plays a crucial role in sponsor satisfaction since it is a common ground that the last impression is the one that eventually stays in people's mind.

Continuous improvement is a notion that we often hear the last decade and review workshops should be involved in it. The idea behind this theory is that companies have to find new ways to sustain their competitive advantage in order to be amongst the market leaders. To do so, they must have a well-structured approach to organizational learning which in project-based corporations is materialized in the project review. Garratt (1987 in Kempster, 2005) highlighted the significance of organizational learning saying that "it is not a luxury, it is how organizations discover their future". Linking organizational learning with Kerzner's (2001, p111) five factors for continuous improvement we can a define a structured approach for understanding projects.

This approach can be implemented in the closeout phase, with systematic reviews for each of the above factors. Doing so, project closure could receive the attention it deserves and be a truly powerful method for continuous improvement within an organization. Finally, project closeout phase should be linked with PMI's Organizational Project Management Maturity (OPM3) model where the lessons learned from one project are extremely valuable to other projects of the same program in order to achieve the highest project management maturity height.

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Tuesday, January 25, 2011

Revenue Management Is A Sign Of Success

Nitty-gritty of Revenue Management

Revenue management first noticed and accepted by the airline industry. Many travel and hospitality companies have been focused to the "adapt or perish" hymn while moving towards revenue management. Today, revenue management processes and systems are implemented in number of industries, including manufacturing, advertising, energy, hi-tech, telecommunications, car rental, cruise line, railroad and retail. In the future, companies that ignore revenue management will be at a serious disadvantage.

Actually, revenue management is the concept of adopting the number of implementation of emerging and changing business strategy to revenue management, where you can generate additional revenue from 3% to 8 % and it resulting in possible profit increment of 50% to 100%.

Revenue Management is the application of exercised strategy that estimates consumer behavior at the micromarket level and make the most of product availability and price to maximize revenue growth. Revenue Management is about optimizes revenue from offered business.

Revenue Management is a solid management science that utilizes statistical and mathematical concepts, based on operations research and management science methodology and tools in changing marketing environment to provide information to:

. Precisely review prospecting consumer behavior under dynamically changing market environment
. Establish the most effective way to price and assign inventory to reach and every prospecting consumer, each and every day, formulate real-time modification as market conditions change, with the consumer in real-time
. Convey this information immediately to distribution and sale outlets which deal with the consumer in real-time
. Work as a decision-support reserve for marketing and operational purpose, containing but not restricted to: pricing, product development, advertising, sales, scheduling, distribution, human resource utilization and capacity planning.

Businesses worldwide are going under remarkable pressure by having giant capital investments occupied to their capacity/resources up to bottom line and to optimizing and recovered revenues from their fragile capacity, products and/or services. So, what can be done to execute RM effectively is very important.

How to reduce the execution pains and optimize the benefits?

In fast changing supply and demand circumstances, how do you handle your resources and price your products and services? The challenges are find out the following:

. How do you predict requirement for distinct products and services?

. How do you assign and set aside the capacity/resources for high revenue/profit customers and products?

. How do you optimize capacity employing as well as revenue realization?

. How do you rework capacity/resource allocations set up on demand on a customary basis to optimize revenues?

. How do you maximize overbooking to lessen service failures costs?

. How do you distinguish product arrangement to maximize revenues?

. How do you chase surplus capacity and propose discounts at the right time to speed up demand without mitigate revenues.

. At what time you change capacity/resources to compete long-term supply and demand?

Adopting the right method of revenue management

From a CEO's point of view, revenue management is serious as it allows companies to successfully direct the challenges of supply, demand and other issues. Revenue management is a course of action and method brings in to order a company, provides it a strategic benefit over the competition by allows the company to sell the "right product to the right customer, at the right price, at the right time." Revenue management strategies stable the tradeoffs amid revenues, capacity utilization and service failures. Revenue management has been shown in many purposes to offer strategic, competitive and financial rewards.

Revenue management systems and processes can provide marvelous strategic return. By implementing revenue management systems and processes, American Airlines observed more than a billion dollars in incremental annual revenues after airline deregulation.

Though RM concept is very simple but execution of revenue management systems has kept very difficult. The availability of current RM system are either in-house or vendor-related and are very costly and time intensive to put into practice and very complex to use in which they upset the processes and people during and after execution.

Unluckily, revenue management execution and applicability have not been focused appropriately and stay behind with two of the biggest obstruction for companies to entirely assign to and profit from such systems. Many users of current systems have objection about the "black box" method used in applying compound revenue management prediction and maximization models. There are many revenue management models available like hybrid class of revenue management, advanced pros revenue management system, Navitaire's Revenue Management System, Portal's Revenue Management System etc to achieve the additional revenue and are vary depending upon the industry in which it is applied. Before implementing a revenue management system any organization must study whether the methods can be useful in their business and the necessity in which, it can push further to develop.

Reducing the Execution Pain

So how do you reduce the pain related with revenue management execution and applicability? Here are some implications:

Open Systems (Internet, Intranet or LAN client/server platform): Companies should force collectively made to order Internet / Wireless application standards, protocols and platforms. By applying software and using open standards investment in IT infrastructure, it can be maintained and comprehended for long periods of time. Revenue management software should harmonize a company's accessible investment in the infrastructure. By leveraging accessible software/hardware/networking infrastructure, companies can reducing the cost of execution and prevent training or failure costs.

Framework flexibility: Components-based and completely integrated revenue management software solutions should be chosen and it should available with existing database and Web/application servers of software built on a flexible framework and can be easily integrated. To apply revenue management systems it should avoid monolithic proprietary systems that propose very little flexibility for ad-hoc decision support or future improvement and software that does not combine with the bequest systems well.

Execution of Phase: Revenue management includes composite estimation and maximization models. When executing such systems today, benefits cannot be completely grasped until all models are entirely incorporated. This could get cost of millions of dollars and more time. Companies should evade ideas that need two to three years and multi-million dollars. A phased approach that gives entry to essential revenue management metrics should be adopted. Although optimization models will be required to maximize supply and demand or maximize resource allotment, the real emphasis in first phase should be to make out and collect the precise data, obtain users comfortable with RM metrics, and apply and make small adjustment of forecasting models until adequate historical data is pull together. This will reducing predicting fault and set up self-assurance in predicting models to lead better RM applicability. Maximizing models should be executing in second phase or soon after. Revenue management systems and processes should address business problems and give activity that generates a path for maximization twelve months after implementing first phase.

Front-End Platform (as opposed to back-end transaction processing platform): In general extremely automated and closely integrated with reservation or transaction systems of companies executes revenue management system at a large. The systems are operating in the back-end and compel extremely practiced analysts to control and manage this method. An easy to use front-end to the compound revenue
management system can develop analyst productivity and get better results. Revenue management systems should agree to users to make what-if analysis to study the influence of parameter or input changes on the prediction and maximization model yield. It should be in such a manner it create any type of ad hoc report as users reflect and analyze.

Time & Cost: Cost of revenue management systems is generally $1 million to $3 million and takes more than two years to put into practice. Companies should look at low-cost, high-value substitute and choose solutions with lessen inadequacies in designing, developing and executing revenue management software. By offering resources to high-priority matter and functionality and by claiming on reducing avoidable functionality and consulting actions, costs and execution time can be considerably lessen.

Demand forecasting and pricing: Demand forecasting is the key tool from which all other revenue management subject goes around. While implementing revenue management systems some times an Achilles heel appears so CEOs should look to demand forecasting and consider that point too. Without precise demand forecasting there will be no optimization of resource provision to products/customers completed. It also include the question, what prices should be specified to which customers through which channels for all products? (Including group, corporate, incentive, Internet.). For example, various demand forecasting methods are used in revenue management in cargo industry are, booking profiles, moving average models, exponential smoothing models (with seasonality and/or trend effects), causal (regression) models, auto-regressive time series models, kalman filters, neural nets, adaptive forecasting models etc.

Automation of Revenue Management:

Automating the method to take out, transform and load data into revenue management data warehouse, run statistical and mathematical models on a periodic basis, and provide easy interfaces to execute the operation are necessary for considerably improve analyst productivity and business performance.

Inventory Control and Sales Management:

The sales strength is also a user of information from a revenue management system. Whether it is computerize inventory control or relationship-based sales, companies recognize noteworthy progress in revenues if appropriate RM ideology is incorporated at all sales levels. The buy-in from sales management and cooperation in set up procedure to pursue RM techniques and in generating corresponding incentives plan is serious for long-term success.

Apart from the above the following points and analytical procedures are also to be considered.

The Revenue Management Lifecycle

Revenue management is a lifecycle of course of action to create, confine, and accumulate revenue for each customer. It has become a significant element of the enterprise. The Revenue management lifecycle also covers a continuing process of examines, appraise, and maximize each phase of the lifecycle.

Revenue Capture

Revenue capture optimizes market share by means of rival pricing models and flexible balance and credit control to allow any service for any subscriber.

Revenue Analysis

On the total revenue management lifecycle revenue analysis is considered and to recognize the revenue relationships with customers and partners it builds up satisfaction. Revenue analysis guarantees all transactions are carrying out with the fullest viable control, integrity, and completeness. It gives real-time verification, reporting, analysis, and control of all procedures and actions which assist optimize revenue and minimize loss linked with fraud and revenue leakage.

Profits of implementing Revenue Management and its future

Companies that want to accomplish something, not just to survive, must put into practice strategic technologies that permit them to constantly alter to vibrant and real-time supply and demand circumstances. Although airlines initiate and exhibit revenue management, it is showing to be a very efficient cutthroat tool in many industries. Unlike other technology vogue, revenue management is extremely rooted in management science and information technology and above all, brings discipline to an organization.

Today, many manufacturers and service providers are facing the problems of revenue generation due to intense competition, margins are shrinking more and more, customer loyalty is spoiling gradually and segregation is critical. More than ever before, industry toppers require reacting rapidly to varying market conditions and shifting customer necessities. To meet these threats, global leaders are heavily shifting

towards revenue management solutions that facilitate them to increase an in depth understanding of the services that customer's value and how they can be brought for maximum profit.

Because creating revenue and optimizing profit are greatest in mind for service providers, they should depend on revenue management solutions to allow them to react to new market opportunities and squeeze the competition by attracting the customer, introducing new services, and in the end driving value to the bottom line. End-to-end management of customer revenue across offerings, channels and geographies are achieved only through revenue management.

The future of revenue management was aptly explained in The Wall Street Journal as follows: "Re-engineering has run its course. You manage your quality totally. Where do you turn for future gains? Perhaps to the marketplace, with 'revenue management.'... Now with computing costs plunging, revenue management is poised to explode."

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The Evolution of Project Management

Importance of Project Management is an important topic because all organisations, be they small or large, at one time or other, are involved in implementing new undertakings. These undertakings may be diverse, such as, the development of a new product or service; the establishment of a new production line in a manufacturing enterprise; a public relations promotion campaign; or a major building programme. Whilst the 1980's were about quality and the 1990's were all about globalisation, the 2000's are about velocity. That is, to keep ahead of their competitors, organisations are continually faced with the development of complex products, services and processes with very short time-to-market windows combined with the need for cross-functional expertise. In this scenario, project management becomes a very important and powerful tool in the hands of organisations that understand its use and have the competencies to apply it.

The development of project management capabilities in organisations, simultaneously with the application of information management systems, allow enterprise teams to work in partnership in defining plans and managing take-to-market projects by synchronising team-oriented tasks, schedules, and resource allocations. This allows cross-functional teams to create and share project information. However, this is not sufficient, information management systems have the potential to allow project management practices to take place in a real-time environment. As a consequence of this potential project management proficiency, locally, nationally or globally dispersed users are able to concurrently view and interact with the same updated project information immediately, including project schedules, threaded discussions, and other relevant documentation. In this scenario the term dispersed user takes on a wider meaning. It not only includes the cross-functional management teams but also experts drawn from the organisation's supply chain, and business partners.

On a macro level organisations are motivated to implement project management techniques to ensure that their undertakings (small or major) are delivered on time, within the cost budget and to the stipulated quality. On a micro level, project management combined
with an appropriate information management system has the objectives of: (a) reducing project overhead costs; (b) customising the project workplace to fit the operational style of the project teams and respective team members; (c) proactively informing the executive management strata of the strategic projects on a real-time basis; (d) ensuring that project team members share accurate, meaningful and timely project documents; and (e) ensuring that critical task deadlines are met. Whilst the motivation and objectives to apply project management in organisations is commendable, they do not assure project success.

However, before discussing the meaning and achievement of project success it is appropriate at this stage to provide a brief history of project management.

Brief History of Project Management
Project management has been practiced for thousands of years dating back to the Egyptian epoch, but it was in the mid-1950's that organisations commenced applying formal project management tools and techniques to complex projects. Modern project management methods had their origins in two parallel but different problems of planning and control in projects in the United States. The first case involved the U.S Navy which at that time was concerned with the control of contracts for its Polaris Missile project. These contracts consisted of research, development work and manufacturing of parts that were unique and had never been previously undertaken.

This particular project was characterised by high uncertainty, since neither cost nor time could be accurately estimated. Hence, completion times were based on probabilities. Time estimates were based on optimistic, pessimistic and most likely. These three time scenarios were mathematically assessed to determine the probable completion date. This procedure was called program evaluation review technique (PERT). Initially, the PERT technique did not take into consideration cost. However, the cost feature was later included using the same estimating approach as with time. Due to the three estimation scenarios, PERT was found (and still is) to be best suited for projects with a high degree of uncertainty reflecting their level of uniqueness. The second case, involved the private sector, namely, E.I du Pont de Nemours Company, which had undertaken to construct major chemical plants in U.S. Unlike the Navy Polaris project, these construction undertakings required accurate time and cost estimates. The methodology developed by this company was originally referred to as project planning and scheduling (PPS). PPS required realistic estimates of cost and time, and is thus a more definitive approach than PERT. The PPS technique was later developed into the critical path method (CPM) that became very popular with the construction industry. During the 1960s and 1970s, both PERT and CPM increased their popularity within the private and public sectors. Defence Departments of various countries, NASA, and large engineering and construction companies world wide applied project management principles and tools to manage large budget, schedule-driven projects. The popularity in the use of these project management tools during this period coincided with the development of computers and the associated packages that specialised in project management. However, initially these computer packages were very costly and were executed only on mainframe or mini computers. The use of project management techniques in the 1980s was facilitated with the advent of the personal computer and associated low cost project management software. Hence, during this period, the manufacturing and software development sectors commenced to adopt and implement sophisticated project management practices as well. By the 1990s, project management theories, tools, and techniques were widely received by different industries and organisations.

Four periods in the development of modern project management.

[1] Prior to 1958: Craft system to human relations. During this time, the evolution of technology, such as, automobiles and telecommunications shortened the project schedule. For instance, automobiles allowed effective resource allocation and mobility, whilst the telecommunication system increased the speed of communication. Furthermore, the job specification which later became the basis of developing the Work Breakdown Structure (WBS) was widely used and Henry Gantt invented the Gantt chart. Examples of projects undertaken during this period as supported by documented evidence include: (a) Building the Pacific Railroad in 1850's; (b) Construction of the Hoover Dam in 1931-1936, that employed approximately 5,200 workers and is still one of the highest gravity dams in the U.S. generating about four billion kilowatt hours a year; and (c) The Manhattan Project in 1942-1945 that was the pioneer research and development project for producing the atomic bomb, involving 125,000 workers and costing nearly $2 billion.

[2] 1958-1979: Application of Management Science. Significant technology advancement took place between 1958 and 1979, such as, the first automatic plain-paper copier by Xerox in 1959. Between 1956 and 1958 several core project management tools including CPM and PERT were introduced. However, this period was characterised by the rapid development of computer technology. The progression from the mainframe to the mini-computer in the 1970's made computers affordable to medium size companies. In 1975, Bill Gates and Paul Allen founded Microsoft. Furthermore, the evolution of computer technology facilitated the emergence of several project management software companies, including, Artemis (1977), Oracle (1977), and Scitor Corporation (1979). In the 1970's other project management tools such as Material Requirements Planning (MRP) were also introduced.

Examples of projects undertaken during this period and which influenced the development of modem project management as we know it today include: (a)Polaris missile project initiated in 1956 that had the objective of delivering nuclear missiles carried by submarines, known as Fleet Ballistic Missile for the U.S Navy. The project successfully launched its first Polaris missile in 1961; (b) Apollo project initiated in 1960 with the objective of sending man to the moon; and (c) E.I du Pont de Nemours chemical plant project commencing in 1958, that had the objective of building major chemical production plants across the U.S.

[3] 1980-1994: Production Centre Human Resources. The 1980s and 1990's are characterised by the revolutionary development in the information management sector with the introduction of the personal computer (PC) and associated computer communications networking facilities. This development resulted in having low cost multitasking PCs that had high efficiency in managing and controlling complex project schedules. During this period low cost project management software for PCs became widely available that made project management techniques more easily accessible.

Examples of major projects undertaken during this period that illustrate the application of high technology, and project management tools and practices include: (a) England France Channel project, 1989 to1991. This project was an international project that involved two governments, several financial institutions, engineering construction companies, and other various organisations from the two countries. The language, use of standard metrics, and other communication differences needed to be closely coordinated; (b) Space Shuttle Challenger project, 1983 to 1986. The disaster of the Challenger space shuttle focused attention on risk management, group dynamics, and quality management; and (c) xv Calgary Winter Olympic of 1988 which successfully applied project management practices to event management.

[4] 1995-Present: Creating a New Environment. This period is dominated by the developments related to the internet that changed dramatically business practices in the mid 1990's. The internet has provided fast, interactive, and customised new medium that allows people to browse, purchase, and track products and services online instantly. This has resulted in making firms more productive, more efficient, and more client oriented. Furthermore, many of today's project management software have an internet connectivity feature. This allows automatic uploading of data so that anyone around the globe with a standard browser can: (a) input the most recent status of their assigned tasks; (b) find out how the overall project is doing; (c) be informed of any delays or advances in the schedule; and (d) stay "in the loop" for their project role, while working independently at a remote site.

An example of a major project undertaken during this period is the Year 2000 (Y2K) project. The Y2K Project, known as the millennium bug referred to the problem that computers may not function correctly on January lst, 2000 at 12 AM. This was a global phenomenon and was highly problematic because resolving the problem at one's organisation did not guarantee immunity, since a breakdown in the organisation's supply chain could affect the organisation's operating capability. Many organisations set up a project office to control and comply with their stakeholders regarding the Y2K issue. Furthermore, use of the Internet was common practice that led to the establishment of the virtual project office. The goal of this virtual project office was: (a) to deliver uninterrupted turn-of-the-century; (b) monitor Y2K project efforts; (c) provide coordination; (d) develop a risk management plan; and (e) communicate Y2K compliance efforts with various stakeholders. Thus, the virtual project office was a focal point for all the project works, and it increased the awareness and importance of risk management practices to numerous organisations.

Why Project Management?

There is no doubt that organisations today face more aggressive competition than in the past and the business environment they operate in is a highly turbulent one. This scenario has increased the need for organisational accountability for the private and public sectors, leading to a greater focus and demand for operational effectiveness and efficiency.

Effectiveness and efficiency may be facilitated through the introduction of best practices that are able to optimise the management of organisational resources. It has been shown that operations and projects are dissimilar with each requiring different management techniques. Hence, in a project environment, project management can: (a) support the achievement of project and organisational goals; and (b) provide a greater assurance to stakeholders that resources are being managed effectively.

Research by Roberts and Furlonger [2] in a study of information systems projects show that using a reasonably detailed project management methodology, as compared to a loose methodology, improves productivity by 20 to 30 percent. Furthermore, the use of a formalised project management structure to projects can facilitate: (a) the clarification of project scope; (b) agreement of objectives and goals; (c) identifying resources needed; (d) ensuring accountability for results and performance; (e) and encouraging the project team to focus on the final benefits to be achieved. Moreover, the research indicates that 85-90% of projects fail to deliver on time, on budget and to the quality of performance expected. The major causes identified for this situation include:

(a) Lack of a valid business case justifying the project;

(b) Objectives not properly defined and agreed;

(c) Lack of communication and stakeholder management;

(d) Outcomes and/or benefits not properly defined in measurable terms;

(e) Lack of quality control;

(f) Poor estimation of duration and cost;

(g) Inadequate definition and acceptance of roles (governance);

(h) Insufficient planning and coordination of resources.

It should be emphasised that the causes for the failure to deliver on time, on budget and to the quality of performance expected could be addressed by the application of project management practices. Furthermore, the failure to deliver on time, on budget and to the quality of performance expected does not necessarily mean that the project was itself a failure. At this stage what is being discussed is the effectiveness and efficiency of project execution and not whether a project is a success or failure.

Conclusion

Project management should be viewed as a tool that helps organisations to execute designated projects effectively and efficiently. The use of this tool does not automatically guarantee project success. (project success will be discussed in a subsequent issue). However, in preparation for the next issue, I would like you to think about the distinction between project success and project management success. This distinction will provide further insight to the questions: Why are some projects perceived as failures when they have met all the traditional standards of success, namely, completed on time, completed within budget, and meeting all the technical specifications? Why are some projects perceived to be successful when they have failed to meet two important criteria that are traditionally associated with success, namely, not completed on time and not completed within budget?

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Helping Supervisors become Performance Managers

How does your organization prepare supervisors to manage employee performance?

What tools does your organization provide to make performance management part of a supervisor's daily routine?

How much emphasis does your organization place on performance management?

If you were able to quickly and easily answer these questions, it's likely that you have made a priority of helping supervisors understand and embrace the importance of being performance managers. If you had to think twice about your answers or if your answers were immediately on the negative side, it's likely that the day-to-day management of employee performance has not been made a priority in your organization.

Performance management, the process of providing direction, feedback, and recognition to employees, contributes to workplace culture. It defines what is important to employees and communicates day-to-day expectations. However, many organizations, public and private sector alike, have become distracted by the crisis of the day and overlook this important managerial function.

When the management of employee performance is not a priority, employers are likely to see reduced levels of employee engagement and commitment. A recent study by Watson Wyatt, 2005/2006 Communications ROI Study, found that clear communication leads to greater levels of engagement and higher levels of retention. The study found that most organizations expect supervisors to take on a greater share of the communication responsibilities, but few organizations are providing the tools that supervisors need to communicate more effectively with employees. This study, and probably your own experience, leads us to the conclusion that supervisors need help in managing the performance of their employees. Supervisory training and development programs play a critical role in helping supervisors become performance managers. The purpose of this article is to provide five tools that will lead supervisors to become better managers of employee performance.

Tool #1: Help supervisors see the cyclical, constant nature of performance management, using the performance management cycle.

In many organizations, performance management is thought about once a year--at performance evaluation time. We know it shouldn't be a once a year activity although many Human Resources departments foster that approach. The performance management cycle, illustrated below, is a sound model to communicate the cyclical, on-going nature of managing employee performance.

If messages about employee performance management are issued only once a year, the result will likely be surprised, angry employees and/or unmet expectations. If the Human Resources department "talks up" performance management on a regular basis by reminding supervisors to address performance concerns immediately, maintain complete and frequent documentation, and have regular, informal conversations with employees about performance, these important activities will remain a point of focus for everyone. If the topic is brought up just once a year, employees will only focus on it once a year.

The performance management cycle can also be used as an outline around which to structure performance management training sessions. Each of the stages in the cycle calls for at least one learning objective and warrants discussion and practice.

Likewise, the cycle provides a roadmap for organizations looking to reinforce effective performance management behaviors throughout the year. One approach is to send monthly or quarterly emails or newsletters to supervisors to remind them of individual steps in the cycle. For example, one month a performance management note may be sent that gives a few tips related to effective documentation techniques. The next month the performance management note might share the importance of having regular and frequent conversations with employees about performance.

The performance management cycle provides a sound structure around which to organize communications about performance management.

Tool #2: Help supervisors clarify their performance expectations.

When asked, "What do you expect of employees?" many supervisors return a blank stare. Though employees are asking this question daily in a million different ways, supervisors often struggle with articulating the answer. Performance management training should help supervisors identify and describe performance expectations so that the expectations can be clearly understood by employees. Here is an exercise you can use to help supervisors articulate their expectations.

First, ask supervisors to write down the behaviors of an ideal employee. These can be general behaviors or specific job tasks. Using the "ideal" as a template, ask supervisors to write a list of their "must have" behaviors on the job. Even though the job description defines the essential functions of the job, each supervisor has his/her own expectations and visions for performance. These expectations often separate the good from the great performers. For example, a common behavior that a supervisor might expect is timeliness. One supervisor said he expected that everyone on the team would be on time and prepared for meetings. When a new employee joined the work unit, the supervisor gave the employee a copy of his written expectations, which included the need to be on time and prepared for meetings. Rarely did this supervisor have a problem with late-starting meetings or unprepared employees.

These kinds of expectations may seem obvious, but when stated clearly by the supervisor, in writing, they become easier to address and reward. Performance management training should provide supervisors with practical tools for articulating expectations clearly.

Tool #3: Help supervisors create documentation easily.

Written expectations, as described under Tool #2, can help supervisors articulate their goals and visions for employees. Likewise, written expectations can serve as the first form of documentation the supervisor creates in the performance management process. Helping supervisors continue the documentation process is the next step.

Most Human Resources professionals have faced a supervisor who wants to address a performance problem with an employee in the performance evaluation or with discipline, and the supervisor lacks adequate documentation to support the concerns. When developing supervisors to become performance managers, the training curriculum should include guidance on how to prepare fair and legal documentation in a practical way that will get implemented when the supervisor returns to the workplace. Here are two recommended training tools that can make the documentation process easier for supervisors:

A. Demonstrate the use of a consistent format for maintaining documentation. Often referred to as a performance log, a standardized form helps supervisors know where to put their notes about performance and can provide a format for writing specific and clear comments. The log can be maintained on paper or in an electronic format. Most online performance management systems include an electronic performance log system. When training supervisors in the basics of performance management, it is important to encourage supervisors to use a log of some form to ensure consistency with documentation.

B. Provide real life examples of what effective documentation looks like. One effective approach is to compile a mock "supervisor's file" that contains 10-15 examples of effective and ineffective documentation. In a training workshop, supervisors can review each piece of documentation in the mock file and critique each item on its effectiveness. The conversation that follows the exercise provides ample opportunity to reinforce the importance of keeping fair and legal performance notes. It also illustrates what should be kept in a supervisor's working file and what should be left out.

Tool#4: Help supervisors have frequent and specific performance conversations.

Typically performance evaluation and performance management training focuses on the mechanics of the performance evaluation system. Supervisors are taught how to fill out the forms, meet the organization's deadlines, and interpret the rating scales. And, while these are worthy topics for a training session, the greatest need of most supervisors is not in the mechanics of the system, but rather in the delivery of feedback to employees. A primary objective of performance management training should be to teach supervisors to have effective conversations about performance.

Performance conversations between supervisors and employees represent the quality of the entire process and yet, in many organizations, performance conversations happen without much thought or preparation and are often tacked on after the evaluation forms have been deliberated over for days.

Performance management training should present a conversation model that supervisors can follow when conducting performance feedback meetings and/or when delivering the end-of-cycle performance evaluation. In addition to providing a model in the training setting, it is critical that supervisors have an opportunity to observe the model via a live demonstration by the facilitator. Following the demonstration, each supervisor in the workshop should be expected to practice using the model in a role play format. This basic behavior modeling approach has been proven to be the most effective method for teaching supervisors to have effective performance conversations.

To help supervisors take the conversation practice to the next level, they should be encouraged to develop their own case study, based on personal experiences. Then, using that scenario, the supervisors should role play and receive feedback on the real life situation in dyads or triads. The application of a conversation model to personal situations leads to the most effective outcomes by reinforcing the learning concepts while allowing the supervisors to build confidence around issues that are personally important.

Tool #5: Help supervisors foster performance-enhancing dialogue with employees.

Performance management training typically focuses solely on the skills and behaviors of supervisors. However, much progress can be made in developing a performance management-focused culture by reaching out to employees. Supervisors must involve employees in the performance management process in order to foster increased levels of communication and trust. It makes sense that training on performance management also includes an element that teaches supervisors to ask the right questions which involve employees in the process.

Many organizations also offer training for employees to help them better understand how they can participate in the performance management process. Employee training might include information on how to appropriately maintain personal performance documentation, reinforce the need for clear expectations between employees and supervisors, and help employees ask the right questions to clarify supervisory expectations.

When we only train supervisors to manage performance, we leave out a critical element of the process. By not involving employees in the training, performance management and performance evaluations become something that is done TO employees, rather than WITH them.

Of course, effective management of employee performance doesn't happen by accident. It must be modeled by top management and actively supported by the Human Resources function. It must be clearly defined, constantly communicated, and consistently rewarded. Supervisors become strong performance managers when the organization places an emphasis on it via employee development efforts. The result can be higher levels of engagement and enhanced job satisfaction.

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Confessions of a Reformed Manager: Seven Principles for Becoming a Good Manager

Another one walked out the door. With him, $25,000 in recruitment fees, $3,000 in relocation expenses and a $31,000 learning curve went down the drain. Clients became uneasy, employee morale suffered and my firm's ability to recruit top talent was negatively impacted.

My management style was costing my firm money and it was exacting an emotional toll on me. Taking each departure personally, I was beginning to feel like a failure.

Like so many young managers, I had been bumped up into management because I was a good producer. No one had considered that production and management require two different skill sets, and that those skill sets are often at odds with one another.

I wanted to be a good manager. I took management courses, read a plethora of self-help books and hired a management coach, but I still hadn't hit on the right formula for management.

Totally ill equipped for my new role, I continued to make mistake after mistake.

It wasn't until I looked at myself that I got it.

First, I had tried to control my employees. Then, I had tried to motivate them, but only when I sought to inspire them did I become a good manager. It was a principle so simple that I had missed it.

Good management is not built upon behavior modification, manipulation or
motivation; it is grounded in intention. Instead of searching for the right combination of words and actions to produce desired behaviors, I began to put my employees' needs first and truly care about them as people. Together we worked toward the company's goals while meeting our individual needs.

Good management is not linear. Like the imagination, it is fluid, flexible and creative. While I found no set rules to becoming a good manager, I did discover seven principles that helped me grow into management.

Good managers know themselves. Good managers know their strengths and weaknesses, and they understand their management styles.

A clue to identifying our management styles can be found by examining our relationships with our parents. Once I looked at my relationship with my father, I discovered why my employees were unhappy. I had adopted his impersonal, authoritarian style.

Good managers share themselves, as well as their knowledge. When I train executives in presentation skills, I encourage them to be themselves. The best presenters are those who share their souls with their audiences, and good managers are no different.

Sharing our souls does not mean becoming close intimate friends with those we manage. It does mean, however, allowing employees access to our lives. Employees want to know their managers as people, too.

Share yourself, but don't share your moods. Employees crave consistency and calm from managers, especially in crises.

At no time do managers show their true colors more than in crisis. I ran red. Adrenaline surged through my blood when faced with crisis. While I was super-productive, I put the office in a hyper-frenzy. By staying grounded, I could get as much done without electrifying the office.

Good management is servant leadership. At its simplest, servant leadership recognizes great leaders are humble servants. Servant leaders manage from the soul and not the ego.

My job was not to do the job, but to get the job done right and that meant ensuring my people had the tools, training, encouragement and trust they needed. By serving them, I met my goals.

Good managers manage the whole person. I used to look on my employees as machines, seeing them only as a means to get the job done instead of the people they were. When I began to look at the whole person, I began to become a good manager.

Being a good manager doesn't mean liking every employee. While I have not liked every person I have managed, I have cared about each one.

As managers, it is important to recognize we cannot separate our employees' work lives from their personal ones anymore than we can separate our own.

I also learned how to utilize employees' strengths and support their weaknesses. No employee has it all. Our job as managers is to create personalized environments for employees in which they can thrive.

Years ago, I hired a senior consultant who was one of the most creative people I knew and had a Rolodex as large as a car tire. Still, she could not manage traditional public relations accounts.

After trial and error, she became "a marketing matchmaker" setting up strategic meetings between companies sharing similar marketing objectives. Her division quickly became one of the agency's most profitable, and she remained a loyal employee.

Good managers thrive on feedback. Key to becoming a good manager is 360-degree feedback. Good managers put ego aside, ask for constructive feedback and act upon it. One of the worse things a manager can do is ask for feedback and not act upon it.

At my old firm, employees filled out "How Am I Doing?" surveys on their managers. To encourage candid feedback, responses were confidential and compiled by an outside source.

From the feedback, managers were encouraged to select no more than three areas for improvement, develop a plan, and share that plan with their employees.

Good managers constantly check in with their intentions. Good managers focus on intentions over outcomes.

One employee had been with the firm for close to seven years. We changed her job description several times to present new challenges and capitalize on her strengths. But as the agency matured, it became apparent we no longer had a place for her.

Over lunch, I learned she was unhappy, and although she wanted to move on, she was afraid. That afternoon, we mapped out a plan that made sense for her and for the agency, set a completion goal of three months, and agreed to meet periodically.

Today, she is the director of marketing for a large professional service firm. She is happy and challenged and looks back on her agency days fondly.

When good managers make mistakes, they correct them fast. Even with the right intentions, we all make hiring mistakes. When we do, we need to correct them fast. Again, if our intention is pure, we can make this transition humanely and with a minimum of disruption to the operation.

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The Mini-Project Manager Concept

"Manage from the bottom up; not just from the top down; this creates personal commitment and accountability."

- Bryce's Law

INTRODUCTION

A couple of months ago we started a free service to analyze a person's style of management. Through our "Bryce Management Analysis," a manager answers a series of questions (30 in all) and, based on his responses, we produce a report which assesses his style of management as well as other attributes.

The data collected from these surveys has confirmed a lot of my suspicions; that companies are regressing back to a Theory X form of management. Over the last twenty years we have witnessed a dramatic swing from a Theory Y or Z form of management, back to Theory X. Whereas workers used to be empowered to make decisions and tackle assignments (a la Theory Y or Z), managers today tend to micromanage every action or decision in their department. Workers are told what to do, how to do it, and when it has to be done, with little regard for their input. We see this not only in the corporate world, but in nonprofit organizations as well. The result is that organizations today are run by control freaks who would be more content working with robots as opposed to human beings. This mentality has resulted in an apathetic workforce that doesn't trust management. It also breeds contempt and disloyalty for management, as well as making for some excellent fodder for such things as Dilbert and NBC's hit comedy, "The Office."

Although there are instances where a Theory X form of management can work effectively, it nonetheless represents a top-down unidirectional "master-slave" relationship. Theory X can work well in certain crisis situations, such as "crunch-time" projects, but it is hardly conducive for a normal mode of operation in today's society. Let me be clear on this, under a Theory X form of management, project planning, estimating, scheduling, reporting and control is performed top-down. Instead, a bi-directional approach is recommended which is a critical aspect of the Mini-Project Manager concept.

THE CONCEPT

The Mini-Project Manager (MPM) concept is based on our experiences in several I.T. shops over a number of years and was first described in the Project Management activities of our "PRIDE" methodologies dating back to 1971. Unlike Theory X, the MPM concept seeks to empower workers and make them more responsible for their actions. It promotes more management and less supervision. Actually, under the MPM concept, the individual is expected to act professionally and supervise themselves.

There are still some top-down activities to be performed by management, such as project planning where projects are defined and prioritized. Further, managers select and allocate human resources to participate in project assignments. It also includes establishing project Work Breakdown Structures (WBS; e.g., phases, activities, tasks) and precedent relationships between such structures. Here, the manager relies on such things as Skills Inventories, Resource Allocations, Calendars, and Priority Modeling tools.

After projects are assigned, workers estimate the amount of effort needed to perform the work. This is a critical aspect of the MPM concept and is typically not found in today's Theory X environments. Here, the worker is asked, "What do you think?" But understand this, the worker's estimate is an expression of his personal commitment to the work involved. If the manager does not agree with the estimate, he may ask the worker to rationalize his estimate. If the manager is unhappy with the answer, he may elect to give the assignment to someone else (perhaps another employee or a contractor). Nonetheless, the estimate is an expression of commitment by the person.

Based on the estimate, the manager then calculates the project schedule. Whereas the worker developed the estimate, the manager computes the schedule. Here, the manager considers the project's WBS and precedent relationships. More mportantly, the manager considers the Indirect and Unavailable time affecting the worker. This means the MPM concept does not subscribe to the "Man Hour" approach to project estimating and scheduling. I have discussed the differences in the use of time in many other articles, but in a nutshell we view time as:

AVAILABLE TIME - this is the time workers are available to perform work; e.g., Monday through Friday, 9:00am - 5:00pm.

UNAVAILABLE TIME - this is the time when workers are not available for work; e.g., weekends, holidays, vacations, and planned absences.

Available Time is subdivided into two categories:

DIRECT TIME - representing the time when workers are performing their project assignments and, as such, estimates are expressed in Direct Time.

INDIRECT TIME - interferences which keep workers from performing their project assignments. For example, meetings, training classes, reviewing publications, telephone calls and e-mail, surfing the Internet, and breaks.

The relationship between Direct and Indirect Time is referred to as "Effectiveness Rate" which is an analysis of a worker's availability to perform project work. For example, the average office worker is typically 70% effective, meaning in an eight hour day a worker spends approximately five hours on direct assignments and three on indirects. Effectiveness Rate is by no means a measurement of efficiency. For example, a highly skilled veteran worker may have a lower effectiveness rate than a novice worker with less skills who has a higher effectiveness rate; yet, the veteran worker can probably complete an assignment faster than the novice. It just means the novice can manage his time better than the veteran worker. Again, what we are seeing is the individual worker being personally responsible for supervising his own time. Interestingly, a manager typically has a low effectiveness rate as he typically has a lot of indirect activities occupying his time. For example, it is not unusual to find managers with a 20-30% effectiveness rate.

Returning to scheduling, the manager uses the worker's effectiveness rate when calculating project schedules. If the worker's estimate is such that it greatly impacts the schedule, the manager may consider alternatives, such as influencing the worker's indirect time (eliminating interferences) and unavailable time (work overtime or on weekends, possibly cancel vacations, etc.).

This brings up another important aspect of the MPM concept, the manager is responsible for controlling the work environment. In addition to the physical aspects of the job such as the venue and tools to be made available to the worker, it also includes managing Indirect Time. For example, if a worker is working on a project assignment on the critical path, the manager may elect to excuse the worker from meetings and training so that he can concentrate on the project assignment. Whereas the individual worker is concerned with managing his Direct Time, the manager controls the Indirect Time. It is important to understand that nobody can be 100% effective; for nothing else, we as human beings need breaks so that we can refocus our attention on our work.

The "Effectiveness Rate" technique serves two purposes: it builds reality into a project schedule, and; it provides a convenient mechanism for a manager to control the work environment. For example, a manager may decide to send someone to a training class to develop their skills (representing Indirect Time). By doing so, he is weighing the impact of this decision against the worker's current assignments.

As workers perform their project tasks, they report their use of time (representing another "bottom-up" characteristic of the MPM concept). In addition to reporting time against assignment, workers are asked to appraise the amount of time remaining on a Direct assignment (not Indirects). This is referred to as "Estimate to Do" which is substantially different than the "Percent Complete" technique whereby workers are asked where they stand on an assignment. The problem here is that workers become "90% complete" yet never seem to be able to complete the last 10%. Under the "Estimate to Do" approach, the worker estimates the amount of time to complete a task. To illustrate how this works, let's assume a worker estimates 30 hours to perform a task. During the week, he works 15 hours on the task. He is then asked how much time remains on it. Maybe its simply 15 hours (whereby the worker was correct on his estimate) or perhaps he determines the task is more difficult than he anticipated and 25 hours remain (15 hours performed + 25 hours "to do" = 50); conversely, perhaps he found that the task was easier than imagined and only 5 hours remain (15 hours performed + 5 hours "to do" = 20). Either way, this will affect project schedules and the manager must then consider the repercussions and take the necessary actions. "Estimate to Do" is another example of where the individual worker is asked, "What do you think?"

Although the reporting of time can be performed in any time cycle, we recommend a weekly posting. This can be performed either with Project Management software or using a manual system involving Time Distribution Worksheets. Either way, it is important for the manager to review each worker's distribution of time (including Direct, Indirect, and Unavailable time) and their effectiveness rate for the week. This review should not be considered frivolous as the manager should carefully scrutinize the worker's Direct and Indirect time as they might impact project schedules.

A good Project Management system should have the ability to "roll-up" time reports into departmental summaries for analysis by the manager. For example, a departmental effectiveness rate can be calculated thereby providing the manager with a means to study which workers are working above or below the departmental average. Again, you are cautioned that this is not an efficiency rating and workers should not necessarily be competing over who has the highest effectiveness rate. Accurate time reporting is required to make this work properly.

Both the individual and departmental effectiveness rates should be plotted on line graphs to allow the manager to study trends, as well as determining averages over a period of time; e.g., three months (quarterly) or annually.

IMPLEMENTATION

Implementing the MPM concept requires a good Project Management system (either automated or manual) and a good attitude by all of the participants involved, both managers and workers alike. Some people resist the concept as it forces accountability. Now, instead of the manager making an estimate, the worker is charged with this task, something that doesn't sit well with some people who shirk responsibility. Further, some Theory X managers falsely see it as a threat to their control and authority. However, most people welcome the MPM concept as it represents more freedom and empowerment. This helps promote project ownership by the workers as they now feel their input is heard by management, which leads to improved corporate loyalty, trust, harmony, and teamwork.

By encouraging worker participation in Project Management, they tend to act more professionally and responsibly in project activities. Interestingly, as workers are given more freedom, they are forced to become more disciplined and accountable at the same time.

CONCLUSION

It was back in 1982 when Dr. William Ouchi wrote his popular book, "Theory Z," describing Japanese management practices empowering workers. And it was in 1986 when President Ronald Reagan advised, "Surround yourself with the best people you can find, delegate authority, and don't interfere." Keep in mind, this was twenty years ago. A lot has happened in the last twenty years; the Baby Boomers have been succeeded by Generation X, who is also being succeeded by Generations Y and Z. In the process, socioeconomic conditions have changed as well as the management landscape. Frankly, I think a lot of the management practices of today are dehumanizing. There is little concern for the people side of management, only numbers and technology. Its no small wonder that workers are becoming more socially dysfunctional.

To change this, I recommend that managers manage more and supervise less. And this is the heart of the Mini-Project Manager concept.

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