Thursday, August 17, 2017

PMP Protein: Strategic Planning, Analysis and Alignment

By Manas Das, PMP



What is Strategy?
To be successful, one organization needs to set a clear, sound strategy. Strategy is how one organization chooses to deliver its products or services to meet customers’ needs. It’s the unique way that our organization carries out its purpose and separates itself from the competition.
A good strategy consists of two major elements:
  1. The value proposition—what makes our organization’s products or services distinctive so customers want to do business with us instead of our rivals.
  2. The value chain—the combination of organizational activities that makes our unique value proposition possible.

Why is Strategy Important?
Excellent execution is not enough to remain successful. Eventually, other organizations will be able to offer customers what we provide—often better or cheaper. Our organization can set itself apart from our competitors by having a sound strategy and skillfully carrying it out. Strategy provides the information that we and managers at all levels need to define our work—and help our organization continue to thrive.

Project Manager’s Role in Strategy Planning
We, as project managers, may play a number of different roles in planning and executing our organization’s strategy.


We may be asked to analyze information that senior managers then use to develop an organization-wide strategy. Units hold tremendous knowledge about an organization and can recommend what it should be doing and where it should be going.

Strategy is usually developed through a strategic planning process which helps to ensure the followings:
  • A strategy is sound
  • All units are aligned with the strategy
  • Strategy implementation is effective

The result of the planning process is a strategic plan.
Strategic plans vary, but they usually segmented across below major contents.
  • Direction statement — a summary of the organization’s vision, mission, and values that guide the strategy.
  • Strategic objectives — goals and outcomes that represent achievement of a strategic vision. 
  • Priority issues — key issues (weaknesses to be addressed or opportunities to be seized) that the organization needs to tackle to be successful.
  • Action plans — specific steps the organization needs to take to accomplish its priority items and reach its objectives.
Your organization may use different terms for these elements of a strategic plan. However, most organizations document their strategy and, in broad terms, explain how they plan to achieve it.

Strategic Analysis 
Strategic analysis is the process of conducting research on the business environment within which an organization operates and on the organization itself, in order to formulate strategy to take advantage of the path of least resistance to achieve your goal.

Strategic Analysis involves:
  • Understanding what you currently do
  • Determining what you want to become 
  • Planning how to get there

A typical strategic planning process looks like this. 
Senior managers in an organization generally begin strategic planning by gathering data and researching the world in which the organization operates. They then narrow in on the top three or four priority issues that the organization needs to tackle to be successful in the long term. 

For each priority issue, units and teams create high-level action plans. Senior managers use these action plans to further clarify the organization’s strategic objectives. Senior managers and units go back and forth several times to examine, discuss, and refine the plan. The overall strategy then feeds into planning at different levels in the organization

Below figure depicts the various steps used in strategic analysis and subsequent strategic plan creation.

Figure: Steps in Creating Strategic Plan

1) Analyze external and internal factors

To begin with part of the strategic planning process, it’s important to look at factors that affect organization units. You also include external forces such as technology changes and internal factors such as aging business processes. 
The goal is to identify as many of these factors as possible and assess their potential impact.
By looking at the changing environment in which organizations are operating, we gain a better idea of our strategic options—and the effect those choices may have on our organization.

2) Perform SWOT analyses
Based on our exploration of external and internal factors, we perform a SWOT analysis. In a SWOT analysis, we and our unit identify strengths, weaknesses, opportunities, and threats.
We may be asked to do two SWOT analyses—one focused on the organization and another on units respectively.
  • Strengths—capabilities that enable your organization or unit to perform well. Your organization needs to leverage these. 
  • Weaknesses—characteristics that prevent your organization or unit from performing well. Your organization needs to address these. 
  • Opportunities—trends, forces, events, and ideas that affect your organization or unit. Your organization needs to capitalize on these. 
  • Threats—possible events or forces outside of your control. Your organization needs to plan for or decide how to lessen these.

3) Identify priority issues
Based on the results of the SWOT analysis, priority issues can be identified.

Priority issues generally take advantage of a short window of opportunity and have major, long-term financial impact.

For example: 
  • After conducting a SWOT analysis for the organization, you and your unit see an opportunity to expand your products into developing countries. You identify a priority issue to enter new markets. 
  • After conducting a SWOT analysis for the unit, you learn that your unit has a weakness in developing innovative products or services. You therefore make greater capacity for innovation a unit priority. 
If someone contributing to the organization’s overall strategic planning process, it’s important to present the priority issues to senior managers. The senior management team reviews priority issues submitted by units as well as ones they have generated themselves.

Senior managers typically select three or four key strategic priority issues for the organization to pursue and delegate each priority issue to one or more units or cross-functional teams.

4) Develop high-level action plans
Once units or teams are assigned priority issues (or “strategic initiatives”), they develop high-level action plans to address them. These plans list the objectives, tasks, and requirements needed to address each priority issue. Each priority issue typically generates multiple action plans. 

For example, if customer retention is a priority issue, it may lead to two action plans: one for improving customer service and another for developing a customer loyalty program.

Once the high-level action plans are completed, it’s sent to the senior management team for review and discussion. Post approval the resources and cross functional team carry out the plans which helps aligning corporate strategy with unit or team action.

5) Finalize the strategic plan
The last step in the planning process is to finalize the strategic plan. At this point the draft of overall objectives or summary intended for contributions to the strategy comes out. 

During the planning process, there might be unit-level priority issues been identified and tasks that will move unit toward fulfilling its own mission and vision.

6) Update the strategic plan
Once a strategic plan is in place, senior managers will regularly review, assess, and adjust it.
If external and internal factors remain the same, it will likely need only minor adjustments.
However, if the environment changes dramatically, then the plan will need to be reevaluated and will likely need major modifications.

Strategic Alignment
Strategic Alignment is the process of how to execute our strategic plans so we will stay on the path to success.
Highlighted below are the key steps to get the strategic alignment. 

1) Communicate strategy clearly
To put your organization’s strategy in motion, people need to know where they are going and why—and be motivated to get there. 
Managers play a key role in communicating the strategy and helping people to buy into it.
Leaders communicate the organization’s overall strategic direction to employees.
Managers translate the strategy into the work their units perform.
In communicating the strategy the reasons for it is made clear.
When people understand the benefits of executing the strategy, they are more likely to choose to do so. 

Communication can take many forms, such as: 
    • Brochures
    • Printed newsletters 
    • Emails 
    • Slideshows 
    • Town Hall
    • Focus groups 
    • Bulletin boards
    • Social media 
    • Surveys and polls
2) Encourage participation
When people gets involved in planning how to execute the strategy, motivation increases. Workshops helps people understand their role in making strategy happen.

3) Clarify decision rights
To successfully execute the action plans, people in unit need to make good decisions and implement them quickly and everyone knows which decisions and actions they’re responsible for—and which they’re not.

Once people have a clear idea of what decisions they should and should not be making, they held accountable for their choices. Avoid second-guessing, micromanaging, or looking over their shoulders—these can undermine self-confidence, prolong the decision-making process, and add confusion. Clarifying decision rights also makes tracking individual achievement easier.

Encourage higher-level managers to delegate operational decisions. Doing so, frees them to focus on the strategies needed to fulfill your organization’s mission—and lets the people doing the work decide how it gets done.

4) Make strategy everyone’s job
To help implement the organization’s strategy, people throughout the organization need timely and accurate information. Information needs to move from senior managers down through the ranks, from people in the field up to their managers, and among units.  

To make strategy everyone’s job: 
  • Help one’s direct reports understand how their day-to-day choices affect your organization’s bottom line. Schedule brown-bag lunches or other less structured gatherings for people to talk about the strategy with leaders throughout the organization.
  • Make sure important information flows quickly from your unit to the leadership team. That way, senior managers can identify new trends, intervene in problems before they spin out of control, and spread best practices throughout the organization.
  • Build networks for cross-unit collaboration critical to implementing the new strategy. Regular meetings and progress reports can foster trust among people from different functional areas.

5) Ensure alignment
  • Start with the right people - through hiring and training, right skills, attitude, and resources to do their jobs well.
  • Ensure that activities align with your strategy. Make certain that all unit actions support the organization’s strategy. 
  • Align your organization’s structure. Ensure your unit is optimally organized to achieve your goals.
  • Align culture and leadership. Model the behaviors and values you would like your direct reports to adopt.
  • Develop incentives. Design a rewards and recognition system that aligns employees’ interests with the success of the strategy.

6) Refine action plans
One may find that his action plans have lost focus or are no longer aligned with the organization’s larger strategy. 

To refine the action plans:
  • Accept that changes to your action plans are inevitable.
  • Be clear about who has final approval of changes. Establish a checks-and-balances system by ensuring that those who propose changes are not the ones who approve them.
  • Ask yourself, “Does this proposed change support our organization’s strategy and priority issues?” If not, consider setting the idea aside and addressing it in the future.
  • Clearly define all the ramifications—for both your unit and your organization—of accepting and implementing a change to your action plans. Consider how the change will impact your deadlines, overall costs, and team members’ workloads.
  • If a proposed change requires additional funding, people, or time not included in your original action plans, determine where those extra resources will come from. You may be able to redirect existing resources within your group without causing too much disruption to the rest of your plans or you may need to lobby senior management for additional resources.
  • Document all accepted changes. These records will prove valuable in the future, when you evaluate completed action plans or create new action plans to advance your organization’s strategy.

References: 
  • Harvard Manage Mentor Strategic Thinking 
  • The Fall and Rise of Strategic Planning - Harvard Business Review by H Mintzberg


Written by Manas Das: 
Manas Das has 12+ years of work experience and is playing a Project Manager role for retail portfolios for North-American geography for Enterprise Application Services at Infosys Technologies Ltd.


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Sunday, August 13, 2017

PMP Success Story: Learn With The PMBOK Guide and Exam Tips by Satya Narayan Dash

By Syed Ehtishamuddin, PMP



Introduction
The passion and interest to get into project management kick-started my preparation for the PMP® certification. I am a technical cum management person. Technically leading the project later slowly induced the interest of getting into management completely. I was hearing about exams and certifications that project managers and project leaders were pursuing. 

Then, after the first training and when I met Satya, I read through the success stories who passed the exam. This inspired me a lot that I can do it. I wished to attempt and crack the exam, and today I am a certified Project Management Professional!!

PMP Coaching Experience
Fortunately, I started with the training at first (Aug/Sep 2016) under Satya where I learnt that studying for PMP can be fun as well. Later within a year, in 2017 April I could clear the exam. Satya’s notes, exam tips, videos, blogs and shared materials helped a lot. Exam tips and notes recollecting during or before exam gave a good confidence to appear for the exam.

Own Study
I was not alone but it was our group who prepared for exam, studied and gave exam together. We were four of us, inspiring each other, helping each other in study, learning and mentoring each other. We attended Satya’s class together, shared the learnings and exam tips learnt from Satya with each other. The group study was very helpful. We did not miss any notes or exam tips. If one of us missed a tip, other helped to fill up the missing tips and notes. In fact, we created a whatsapp group to coordinate, share important information and tips that was helpful when going for exam for quick recollection.

It was all self-study plus the group study. Study one topic and share with others in round robin. We used to meet for 3-6 hours weekly, apart from our daily self-study. Finished reading the PMBOK® guide, one exam prep gook and Satya’s slides multiple times for reference and quick re-collections before the exam.

Studying PMBOK was very challenging. So, we thought it could be more of a reference book than studying. Have the PMBOK guide downloaded on your mobile so that it can be referred everywhere.

PMP Exam Experience
Exam was getting delayed due to other priorities, which was causing us to lose interest and hope as times was passing. We decided to fill application and set the exam date first so that we apply “Students Syndrome” technique to accelerate and expedite. Once exam dates are fixed, we had no way to escape or show laziness. That helped us finishing PMBOK once completely. Revised Satya’s notes and presentation slides and other materials shared. Then took full length mock exams from the institution that offered the training to us and also using other online practice test materials. Was scoring about 70-80% that gave a little confidence. Solving exam prep questions as well increased confidence level.

During the Exam
Facing 200 questions sitting four hours continuously was a hard experience. However, the confidence after studies and the “Exam tips from Satya” made it is easier to overcome the hurdles. I was slow and calm in exam and reading questions thoroughly. Though my other group mates finished early, I had only 10-15 minutes for revision at the end. My marked questions for review were comparatively less. During the review, I did not change any answers. Just was confident on what I had selected for first time. I didn’t leave early but sat till the last minute, though it was very difficult to sit in the 4th hour [ since we, in our work life, never sit and work this long, even school/college day exams were lasting max three hours ;-( ]. I was standing some times in between. Filled even the feedback with calm and finally cleared the exam.

I like to thank my colleagues/PMP Exam group mates who inspired, supported and facilitated a group study and appearing exam together that boosted confidence.

Thanks to Satya, for initial PMP foundation through the training and his material (especially the way he made us to remember all 47 process groups, ITTO (Inputs, Tools & Techniques and Outputs) and tips. The first day of training I was blank and stunned when Satya’s wrote all 47 processes chart on board, but the last day he made us able to write them on board by our own that built our confidence.

Finally, thanks to my family who supported me, inspired me with weekend outings/shopping sacrifices.

Suggestions for PMP Aspirants
  • If you are very passionate and profound interested in becoming project management certified professional, then book the exam dates first after first cut of initial PMP foundation training. This will ensure your dream turns into reality as early as possible. 
  • Set exam dates with sufficient duration and such that you will be able to study. You can also take into account Satya’s opinion on duration with his mock test at the end of training where he evaluates and tells you when you can give the exam. Based on that and your confidence, select an approximate exam date first. This pushes you to prioritize this over your other activities and ensures you give exam without any delay. Otherwise you may keep pushing the exam and if it delays more, then there is chance you may forget what you studied, and eventually lose interest and hope.
  • Prepare self-notes. One example is shown below.

    • Another example is formulae list, fetch from books. List is available in the books.
    • We prepared many such notes that helped for quick review on exam day morning.
  • Practice tests are must for confidence. At least two full length tests completion and scoring to the satisfaction before appearing exam. There are even Apps available online for practice questions.
  • Remember - mugging up does not help! Limit memorising to only where it is necessary. Rather understand the concepts, and definitions of each processes, their groups and knowledge areas, correlate the ITTOs with practical experience.
  • Use the tips shared by Satya.
Conclusion
It was party day when we cleared the exam. It gave more interest and confidence that I can pursue my career into the next levels of project management, and grow with growing organizations.

On a fun part I started applying the learnings in my personal life too along with professional life. Applied Kanban and lean in my day to day life to fill the home refrigerator only on demand and signal cards. My wife has now turned against Kanban ;-) , but likes Kaizen (continuous improvement) mind-set for household activities ;-).

Brief Profile:
Syed Ehtishamuddin, Project System Leader in an MNC. 



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Monday, August 07, 2017

PMP Protein: Earned Value Management – Basics

By Sathish Babu, PMP



Earned Value Management (EVM) is one of the most important concepts that you need to understand for the PMP® exam and you may expect a good amount of questions from this topic. This technique helps you to think about your project the way your sponsor thinks about it.

Benefits of EVM:
Have you ever wondered if there would be a best practice to help you figure out how your project is progressing and better way to control costs rather than rely on hope, guesses, general estimation or approximate percentage complete? 

  • How valuable will it be, if you know the answer for the following on your project:
  • Are we behind or ahead of schedule?
  • Are we currently under or over budget?
  • When is the project likely to be completed?
  • What is the remaining work likely to cost?
  • How much will we be under or over budget at the end?
These are the benefits of EVM and it has been used as one of the tools and techniques in the “control costs” process under the “project cost management” knowledge area.


Why To Conduct EVM?
Listed below are few key points.
  • Helps to figure out how much of your project’s value has been delivered to the customer so far.
  • Helps to know that how you are doing compared to how you thought you would do.
  • Helps to control the performance measurement baseline (Scope baseline, Schedule baseline and Cost baseline).
  • Helps predict future performance based on trends.
  • Provides accurate and timely data for effective decision making.
  • Helps to find changes you need to make on a project. It may also result in change requests.

Advantages of EVM:
Listed below are few key advantages of EVM.
  • Preventing scope creep.
  • Improving communication and visibility with stakeholders.
  • Reducing risk.
  • Profitability analysis.
  • Project forecasting.
  • Better accountability.
  • Performance tracking.
Terms to know for EVM calculation:
First, we need to understand the following. 

1) Baseline is a snapshot of the planned budget, schedule and finalized scope for a project. You compare your actual performance against the baseline so you always know how you are doing versus what you planned.

2) Budget at Completion (BAC) is just your project budget. Once you finalized and estimated cost for all activities and resources, you will get the total project budget. This is shown below. (reference sources - “I Want To Be A PMP” book and PMBOK® Guide 5th Edition.)


Project Budget Components

3) Planned Value (PV) is also referred to as Budgeted Cost of Work Scheduled (BCWS) defines the physical, scheduled or planned work that should have been completed.

Formula for PV = BAC x Planned % complete

4) Earned Value (EV) is also referred to as Budgeted Cost of Work Performed (BCWP) all about how much your project actually earned. When you calculate EV, you are showing your sponsor how much value that investment has earned.

Formula for EV = BAC x Actual % complete

5) Actual Cost (AC) is also referred to as Actual Cost of Work Performed (ACWP) all about the costs actually incurred for the work completed by the specified date.

6) Schedule Variance (SV) is about the difference between PV and EV, to tell whether the project work is ahead of, on or behind schedule.

Formula for SV = EV – PV

We can interpret SV as below.
  • If the variance is positive, your project is ahead of schedule.
  • If the variance is negative, your project is behind schedule.
  • If the variance is zero, your project is on schedule.

7) Cost Variance (CV) is about the difference between EV and AC, to tell whether the project work is under, on or over budget.

Formula for CV = EV - AC

We can interpret CV as below.
  • If the variance is positive, your project is under budget.
  • If the variance is negative, your project is over budget.
  • If the variance is zero, your project is on budget.

8) Schedule Performance Index (SPI) is about the ratio between EV and PV, to reflect whether the project work is ahead of, on or behind schedule in relative terms.

Formula for SPI = EV/PV

We can interpret SPI as below.
  • If the ratio is greater than 1, your project is ahead of schedule.
  • If the ratio is less than 1, your project is behind schedule.
  • If the ratio is equal to 1, your project is on schedule.

9) Cost Performance Index (CPI) is about the ratio between EV and AC, to reflect whether the project work is under / on / over budget in relative terms.

Formula for CPI = EV/AC

We can interpret SPI as below.
  • If the ratio is greater than 1, your project is under budget.
  • If the ratio is less than 1, your project is over budget.
  • If the ratio is equal to 1, your project is on budget.

How to Calculate Earned Value:
The best way to understand EVM example is to solve one example. So, let’s take one simple example to understand it.

A project has a budget of $1,000,000 and schedule for 10 months. It is assumed that the total budget will be spent equally each month until the 10th month is reached. After 4 months, the project manager finds that only 10% of the work is finished and a total of $200,000 spent.


These values are important to identify whether you’re on, ahead of, or behind schedule and on, under, or over budget. But just comparing your actual expenditures with your budget can’t tell you whether you’re on, under, or over budget. This is where variances and performance index comes in.

How to Calculate Variances and Performance Indices:
Let’s take the same problem to calculate further.

To arrive at the correct answers for EVM questions, all you need to do in the PMP Exam is to,
  • Read the question carefully.
  • Select the correct formula to apply.
  • Calculate the answer (this is often the easiest part! You can get most answers without the use of calculators).
In common practices, EVM will also involve plotting the values on a graph in order to help stakeholders concerned to visualize the progress and the health of the project. This is shown below.


Now we have identified the actual status of a project and how it is progressing. We will discuss more about future performance and forecasting calculation for a project in my next article.

References: 
1. “7.4 Control Costs” from PMBOK Guide 5th Edition.
2. “Chapter – 8: Project Cost Management” from Book “I Want To Be A PMP” by Satya Narayan Dash.
3. “Chapter - 7. Cost Management” from Head First PMP 3rd Edition.

Written by Sathish Babu:
Sathish Babu is working for Kodiak Networks as a Project Manager and having 11+ years of experience in Product, Project Management and Service Delivery in Telecom domain.