Managing Projects Involving External Threats
© 2003 by Ilya Tirdatov, Houston, TX
Introduction
The criticality of the time factor in the implementation of a
given project may be directly related to the weight and potential
impact of the external threats emerging throughout the life
of the project. In many cases the project manager is fully
aware of their existence, but, at the same time, their emergence
is hard to predict and impossible to control.
This requires some preventive action to be taken in order to
minimize the possibility of the project being affected, or sometimes
destroyed by the impact. This article is intended for project
managers and emphasizes the significance of optimizing the project
timeline to reduce the possibility of a failure as a result of
the actualization of the existing hazards.
Optimized Timings Help Reduce the Potential Threat
By definition, project management is a complex process dealing
with numerous variables and aspects, some of which are totally
beyond the control of the person or persons responsible for the
successful implementation of the project. Of course, the level
of control that a project manager can exercise may vary in each
particular case.
To illustrate this, we shall compare two projects. One of
them involves logistical support provided by a contractor to
an oil company engaged in oil exploration in a jurisdiction
that is considered stable from an economical and political
standpoint. The other is concerned with residential real estate
development in a "third-world" country with a highly
unstable economy, which involves the possibility of high gains
(should the purchasing capacity of the potential buyers remain
at the same level as it was during the project initiation phase)
as well as of high losses in the event of a major downturn
in the country's economy.
While in the first case the principal complications, such
as finding the local subcontractors, arranging for transportation
and delivery of equipment to the site, etc., are mainly of
a technical nature, and thus may be considered as manageable,
the latter scenario involves a significant job-unrelated threat.
However large and influential the real estate developer may
be, both in terms of its home country and local political and
economical affiliations, it seems unlikely that it can exert
any significant influence upon the economic tendencies in the
country it has chosen for implementing the project.
Having accepted the incremental risks of indefinite factors
entering the playing field, the contractor has to consider
the ways in which the risk may be localized, if not managed.
One of the key considerations in this respect would be the
timeframe of the activity. In the above example, it would be
in the best interest of the company to complete the project
and put the real estate on the market as quickly as possible,
considering that, the longer the preparation and construction
phases take, the higher the chances are that the situation
would change.
We can go further and offer a trivial but frequently unaccounted
for generalization: whenever a project is largely dependent
upon factors beyond the control of the project manager, the
manager may be required to make every effort to complete the
project quickly. This would narrow the period during which
a negative factor unexpectedly coming into play could undermine
the activity and possibly bring it to a total failure. Thus,
the longer it takes you (beyond the minimum possible) to complete
a project involving a high level of indefinite external threats,
the more possibilities there are for you to fail.
• Top •
This rule may be expressed through a simple formula: Ps = T-1 * 100
where P is the "probability of success" expressed
in % and T is the amount of time spent on a given activity.
For the purposes of this equation, T=1 is the minimum amount
of time that may possibly be spent to complete the activity.
It may be determined through careful consideration of all the
components the project consists of, and the development of
best-case scenarios for each component in terms of the shortest
possible timings.
If, for example, the actual timings exceed
the minimal estimates by 1.5 times, Ps = 1.5-1 * 100 = 67%
i.e. the probability of success is reduced due to the possible
effects of indefinite factors that are more likely to come
up over a longer period of time.
The above formula is not, by any means, intended to express
all the complexities and eventualities of life in one primitive
equation. Even the most simple and "definite" activity
would probably be governed by a much more complicated set of
principles, rules and factors, than those that claim to bring
its success into linear dependence upon only one basic variable,
being the time. The intent of this formula is only to illustrate
how, under certain circumstances, the time can acquire critical
significance, possibly outweighing many if not all other considerations.
A Questionnaire
Therefore, in certain situations, while giving
consideration to other factors such as quality, costs, technologies
applied,
etc., the project manager may want to consider the objective
of completing the activities within the shortest possible time
period as #1 priority. In order to determine the applicability
of such an approach, the following questionnaire may be used:
(1) In your opinion, what is the likelihood that, throughout
the life of your project, major hindering factors that are
mainly beyond your control (such as political, economical changes,
competitive action, etc.) may come up that would undermine
the project?
(a) High
(b) Medium
(c) Low
(2) If the answer to (1) is (a) or (b), based on the available
information, can you estimate when exactly the above occurence
may take place during the course of your project?
(a) It may happen at any time.
(b) It is likely to happen between the middle and final stages
of the project activities.
(c) It may only happen at the very beginning, if at all.
(3) Do you consider it possible to adjust the project schedule
in order to significantly reduce the overall time required
to complete all activities without compromising the project
objectives?
(a) It can be done without any serious consequences.
(b) It can be done, with a certain reduction in the overall
quality, increase of the project costs and/or other adjustments
that would still be passable.
(c) The existing timeframe reflects the absolute minimum amount
of time required to achieve acceptable results, and any further
reduction would lead to a failure to meet the key project objectives.
If the answers to all of the above questions are either (a)
or (b), the project manager should seriously consider making
revisions to the schedule to reduce the overall period of the
activities. However, if one or more of the answers are (c),
it is likely that the reduction of the time period would not
add any value to the project.
While the above questions are intended for the project manager
as the key person responsible for the implementation and scheduling
of the project activities, the complex nature of the questions
may require a group discussion so as to ensure that the answers
are as objective as they may be. Depending on the size and
scale of the project, the scheduling may be discussed by the
members of the project team, members of management, or, based
on the relative importance of the project for the company,
by a specially appointed committee.
Furthermore, in order to identify the smaller jobs and actions
comprising the key activities implemented within the project,
and to determine how each of them may be expedited to result
in a shorter timeline for the overall project, proactive input
will be required from the project personnel at all levels.
The manager should be able to effectively collect information
from the people ultimately responsible for doing the job. He
should also encourage them to come up with suggestions as to
how the work processes may be optimized in order to allow for
reduced timings, with the negative impact on quality, costs
and other important constituents being minor to none.
In the project management environment time is only one of
the factors to be considered along with costs, quality, marketing
aspects, etc. However, during the process of scheduling the
activities for the projects involving major external threats,
in certain cases the project manager should demonstrate the
qualities of a true pessimist and view those potential hazards
as a "clear and present danger".
The aftermath of many failures shows that, had the activity
been completed a few months, weeks, or even days earlier, it
would not have taken that final hit from the unknown, which
ultimately made all the difference between total success and
complete disaster. Therefore, upon a careful analysis of the
situation, the project manager may want to concentrate on optimizing
the time schedule in order to reduce, and, in some cases, eliminate
the possibility of a major blow coming from the external environment.
• Top •
About Ilya Tirdatov
In the past several years Ilya has held project management
and business development positions with companies involved
in B2B services (major BTL marketing service provider, international
Internet-enabled recruitment agency) at mid-to-senior level.
Ilya is currently involved in developing the business of
a Houston-based company providing technical translation services.
|
