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June 2017

 
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Bad experiences teach us more than Good Ones

- Balaji Rajagopalan


Overview

I recently visited a grocery retail outlet near my house for grabbing a few bytes.

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At the Point of Sale (POS) counter was kept a small device for the customer to share their feedback on the day's shopping experience. I was not clear if the device was working or it is just a display piece. I asked the cashier and there was no reply from her side. I assumed it was a display piece. What happened next was very interesting - the cashier after finishing my billing pressed the button "Great" in the feedback device. I was stunned! I thought the device was not working. I asked her why did she not allow me to give the feedback for which she did not reply. I felt cheated. I went to the corner of the store near the exit and started observing the cashier. After every transaction she was pressing the button "Great" as if to convey every customer had a great shopping experience. I could not control my anger and had a conversation with the lady who was least worried about this feedback tool. I left the store wondering what will the management believe by looking at this

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data! This one bad experience opened my eyes and made me think on what a good feedback mechanism should do.


Take Feedback the Right Way

• Take feedback from the people who matter - your customers! Sounds funny but I have seen feedback being taken from people who do not matter. Focus on the primary users and not anyone else.

• Feedback should be fool proof - there should be no opportunity for anyone to tamper with the feedback.

• As much as possible the feedback should be digital - In the above example the feedback could be taken via the persons mobile.

• Look for patterns in the results - patterns help in understanding if there is a tampering of the feedback happening. Continuous 5/5 ratings does not mean we have a great product it could mean compromise on the data.

• Make the employees (of the product team) understand the power and importance of the feedback. Bad feedback allows us to correct our mistakes, continue doing what the users like and come up with something new.

• Observe how many users give feedback. Less number of feedback could mean something is wrong either with the product or with the feedback survey itself.

• Focus on opportunities - Ask the users for ideas to improve the services or product as part of the feedback.

• Don't just rely on feedback also use Analytics such as google analytics, hotjar and other tools to understand user behavior. After all there is always a gap between what people tell and what people do.

To conclude quality feedback is the best tool that helps correct our mistakes. Hence, focus should be to get quality feedback. A good practice of collecting quality feedback - as long as this practice is in place, we can sustain ourselves in the business!

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Project - Setting up for failure

- A.K. Manjunatha

Though every Project Manager aims at successful completion of a project, the following could be the reasons why projects fail:-

Projects keep businesses running, and thus, managing amicably the various stakeholders towards a common objective is vital. It gets challenging as it is complex and could be new. However, one project which I would like to share the experience is the one which had good revenue return. Project delivering in a short span of time helps to retain the Customer and get more Business.

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The probable reason why the project got delayed beyond expectations and hence led into failure are: -


1. Team not in Sync:

One black sheep at the top, who wants to show that the team cannot function without him, can destroy the team spirit. Wounded ego's need to be addressed. Find facts not faults should be the way to go ahead. What went wrong rather than who did it wrong helps.

Not sharing periodic update to management on the delays has lead to casualness and thus casualty of the project.

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2. Single Point of Failure:

When the architect of the project, working since over a year, is not sharing vital information but just taking in what is important to him, is like a pebble in the shoe. Nobody is indispensable however, when one person with a inflated ego gets too much of importance, the team could go for a toss! If a touch decision was taken on this, the project could be completed in time.


3. Communication & Relation:

Connect is the way to go ahead. Delivery has always been sub-optimal in the last 8 years, due to sub-optimal connect in this team. Not sharing periodic update to management on the delays has lead to casualness and thus casualty of the project. The impact of mistrust with global stakeholders is due to the mistrust in the team.

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4. Commitment through Conviction:

No action of multiple wrong commitments of final dates of project completion by the Engineering Leader. This drained down the Team Confidence. As offering team is distributed geographically, they were losing confidence with the team. A stronger Leadership could have kept R&D Team and offering team on the same page for better results.

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5. Clarity in Roles:

The lack in clarity of the roles is one of the key issue, which lead to additional delays in the tasks completion and piling up of work. For example, work to be carried out by the Architect, adding the requirements or user stories to the tool, was not done for 3 months. The assigned architect had no freedom to carry out her/his work as needed, though after repeated requests.


6. Prolonged Proof Of Concept (POC):

The Proof of Concept was not concluded quickly and carried out for a year. The lesson learnt here - POC has to be looked at Minimal Viable Offering (MVO) required for the customer to go to market quickly.


7. Wrong Project Offering Strategy:

As the project was having three different deliverables, segregating as a separate release for each deliverables and generating revenue incrementally could have been done. We went ahead as a single project for three MVO's. First MVO was completed successfully but not released officially as a separate release. Segregating with the MVO's as a release has put enormous pressure on the team to complete remaining MVO's and not generating revenue for completed MVO.

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The Four Big Issues in Project Management Today

- Soumya Patil


Overview

Everywhere we see people debating or discussing the complexity of management in the Project Management arena. In the past, it was all about the Benefits, Ethics, Processes, Stakeholders, etc. Today, the debate seems to be riven, there isn't one big topic by virtue. At this point, Companies are facing some uncertain issues that seem to be happening simultaneously. According to PMI's Pulse of Profession report, due to poor Project Performance Enterprises are wasting approximately $97 million for every $1 billion invested. This is the result of improper Project Management Strategies. The persona of a Project Manager should not only be comprehending to Project Management Methodology, but also entail handling challenges on numerous fronts. The most saturated and painstaking concerns in Project Management are listed below.


#1. Leadership

Nowadays, Project Management means traditionally following best practices, adhering to standards, and using processes to move an idea from the concept stage to implementation. Project Managers mainly focus on setting goals, managing benefits, helping teams understand the business case, and putting the project into the organizational context. But, leadership is not limited to these practices. Many enterprises can still deliver their projects without proper leadership goals, but the lack of leadership leads to several negative effects on the company, project, and employees as well.

Apparently, the role of a Project Manager is changing to a Project Leader. Project Leaders inspire their team and act as mentors. Leaders not only get their projects done, but also improve the communication, employee satisfaction, and quality of work. Organizations must provide more flexibility in terms of work and moral values. Here are a few facts that strongly lead to opportunity loss of not having leadership principles in place:

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• Poor leadership creates a lack of vision amongst employees.

• It causes huge gaps between strategy and execution..

• It is the root cause of the culture of mediocrity and low morality.

Today, employees resist to micromanagement. Command and control structures are hardly seen. A study report from U.S. Department of Labor says people of age group 18-to-38- years stay at a job for not more than four years. Today's generation has a distinct perspective towards work than the generation before. Hence, effective leadership is mandatory for the betterment of project and a healthy team.


#2. Risk

There are many Project Managers who often tend to give too little emphasis on project risks. The activities such as risk identification, contingency, and mitigation plans must be started from project tendering and pre-tendering phase. Some consequences of not having proper risk management plan are collated here:

• Organizations lack in confidence.

• They deal with potential problems in an illogical manner.

• Companies not working on real-time risk planning cannot actually take critical business decisions easily.

Generally, it is misunderstood that risk is a problem, but ideally, risk is the recognition that a problem might occur. Virtually, it can be said that there are different approaches to project risks:

• Avoid: Risk can be avoided by slightly changing the project scope.

• Accept: Some of the risks are bound to occur, irrespective of mitigation plans. The best strategy is to accept it and take certain obligatory steps to reduce its impact.

• Contingency: If the risk cannot be avoided, then place a mitigation plan to minimize its effects.

• Reduce: Reduce the existence of risk at the initial stage.

• Transfer: Some risks can be transferred to a third party. However, it comes with a certain associated cost for curbing negative risks.


#3. Value

Enterprises must have a clear vision and differentiation between benefits and value. Benefits mainly connect with finance, sales, marketing, etc. that are tangible parts of business and value is all about customer-centricity and stakeholder satisfaction. Of course, benefits and value go together but value is more difficult to earn. But despite being the top driver of project existence, a project shouldn't be executed only for benefits. The qualitative work and business relationship with stakeholders add value to the organization's success. Today, stakeholders are more interested in the return of value than the return on investment. There is a reliable relation between value and leadership qualities, value can only be delivered with good leadership skills. But the challenge is to quantify the value drivers.


#4. Talent Management

A research from PMI says that there is a shortage of talented people across the global organizations, and it is the underlying problem in every firm. To reduce the project cost, process team leads are enforced to perform the role of a Project Manager. Many of them do not even hold the title of Project Manager.

Such Project Managers or Team Leads cannot perform efficiently due to the lack of training and experience. Such accidental Project Managers must be recognized and credentialed with supportive training and certification. They must be accomplished with Management Skills to address the talent gap so that they do their jobs to the best of their ability. However, certification is not enough to excel in Project Management. A person needs enough domain experience to handle certain critical situations.

There is an authentic relation between talent and business performance. The value creation discussed earlier comes with great talent management tactics. Enterprises must encourage a culture and scope of career development with higher learning abilities of their talented employees, who in turn will get the quantifiable value to the organization. However, organizations which don't have suitable Talent Management Strategy will probably undergo certain critical situations in the long run like:

• Lack of employee engagement.

• Retention of productive employees.

• Lack of growth and innovation in employees.


Conclusion

Project Management requires an awareness of the strategic issues during the Project Life Cycle. It is essential to deal the project challenges with a practical approach. Thus, it is feasible to anticipate the project issues before they have an opportunity to ascend and saturate. This helps the Project Managers to address the issues assiduously, thereby increasing the project success rates.

Disclaimer : This article is owned by Computer Aid Inc aka CAI (http://www.compaid.co.in). The person mentioned in the author's section coordinated to get necessary approvals to publish in PM Essence for sharing the knowledge with Project Management Community.

 

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Finance Acumen for Operations Manager

- Dr. V. Bharathi

In the changing business scenario, the primary concern of any business is to enable the organization to constantly deliver good financial results leading to sustained growth of the business in the changing times while making best use of the opportunities and steering challenges. Operational and Financial performance are the two sides of the same coin as companies need to optimize operational performance to support financial performance. Accordingly a certain degree of financial acumen is vital for all the business stakeholders to appreciate the link between operational performance and financial health of the Company.

This article examines the link between operational performance and financial health of the company in a multi project scenario. Interwoven aspects in the business are raising funds, investment in capital and working capital, revenue generation and wealth creation. These aspects are recorded in two important financial statements, Profit & Loss Statement and Balance Sheet.

The ‘Profit and Loss Account’ or the ‘Income Statement’ summarizes the various components of revenues and expenditures. The net difference between the two constitutes the ‘Income’ or ‘(Loss)’, as the case may be. The Balance Sheet is a statement of assets and liabilities at the end of the accounting period (a "snapshot") of the business. The balance sheet shows at a particular point in time what resources are owned by a business ("assets") and what it owes to other parties ("liabilities"). It also shows how much has been invested in the business and what were the sources of that investment finance.

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The operational performance begins from the phase of raising required funds from the appropriate sources at a reasonable cost. There begins the journey of creation of Liabilities and Assets for the organization. Investment decisions are very critical as it measures the company’s ability to utilize its assets to generate revenue. Operational performance at every stage impacts the profit and wealth maximization objectives. The operational performance has direct impact on the liquidity, solvency, asset utilization and profitability of the company. The flow chart above shows the bird’s eye view of financial management in Business Organization.


A. Liquidity Position

The liquidity position of the company can be ascertained by establishing a relationship between current assets and current liabilities. In other words, understanding how much current assets are maintained for every one rupee of current liability. It is appropriate to maintain 1.5 to 2 times current assets to current liability. A ratio of less than one is often a cause for concern, particularly if it persists for a considerable length of time. Too high current ratio is also not good as excessive money blocked in the current assets reduces profitability.

The liquidity position of the company can be improved by optimizing the Operating cycle time. The time required for a business to make an initial outlay of cash to produce goods and receive cash from the customers in exchange for the goods or services is known as Operating Cycle(OC) or Cash Conversion Cycle (CCC). The figure below shows the Operating cycle elements.

A few important operational aspects that optimizes the duration of the Operating cycle are :


I) Supply Chain Management

• Identification and development of competent suppliers

• Proper estimation of procurement lead time

• Execution of contracts

• Sustenance of Suppliers


II) Production Management

• Suitable manufacturing facilities

• Proper planning and scheduling

• Process capability

• Competent workforce


III) Receivables Management

• Assessing customer’s credibility

• Credit policies

• Follow-up and monitoring mechanisms


B. Solvency Position

The term solvency implies the ability of the enterprise to meet its long term obligations on the due date. Long-term lenders are primarily interested in two things. The safety of principal which is to be given by way of loan, and regular servicing of the loan, in the form of payment of interest commitments and repayment of installment of loan.

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Employment of short term and long term funds appropriately is very significant in magnifying the shareholders return/wealth. A few Operational parameters which impact the solvency position of the company are deployment of short term and long term funds, execution of sale orders, realization of money from customers etc.


C. Asset utilization

Company creates assets to generate sales. The utilization of assets is ascertained to review the decisions of asset acquisitions. This measurement triggers various questions such as “Are we blocking too much money in fixed and current assets?”, “How much revenue is being generated by each rupee’s worth of assets invested in the business?” etc. A few factors that influences the companies to block their money in fixed and current assets are:

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D. Profitability

Every business aims to earn profit as it is required for the survival and growth. The need for reasonable profit in a business is to contribute to the net worth of the organization. Company's overall efficiency and performance gets reflected in various profit levels. It is very important to assess the profit earned or returns relative to the various elements of business like Cost of goods sold, Sales, Capital Employed, Equity etc.

A good sense of financial awareness would help Operations Manager to take appropriate decisions in every stage of the business leading to improved liquidity, solvency, asset utilization and profitability positions.

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Event Calender for July

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