Project Levers and Gauges
© 2005 by Stacy Goff, PMP; President of ProjectExperts®,
and 2001-2007 asapm Vice President
Abstract
Government and Enterprises are trying to do more with less. Faster and Cheaper
is an attractive theme, but can result in poor project performance without
agreement about the priorities, and competent project management to achieve
them. This article points out the flaws of mistakenly attempting
to control project gauges, and the benefits of more effectively managing
the project levers, so project managers and teams achieve their targets.
Prioritizing the Most Important Project Factors
In our project consulting practice, the first step we use in coaching the kick-off
of large projects is to prioritize the project’s key dashboard factors
(see diagram at right; click it for a larger view).
The factors consist
of four to six or more key elements, most of which are related
to project knowledge areas: Time, Cost, Scope,
Quality, Risk, and Benefit/Cost Ratio. We include Benefit/Cost ratio in the prioritization because while it is difficult to evaluate, it is an ultimate success measure in many projects.
In our Initiation process, stakeholders prioritize the factors
to get rank-ordered priority of the top three. Then during the
project, we manage to optimize those factors, while monitoring
all of them, typically using a project dashboard (see graphic).
The result: Everyone is managing to the same success criteria.
For more information on this prioritization exercise, see our
article here
at the asapm site.
Ways to Get to Faster and Cheaper
Given agreement about which factors are most important (and Time
and Cost are often among them), we’ve seen two approaches
Project Managers (and their Managers) use to succeed in managing
them:
1. Attempting to control Time and Cost to assure you meet those
targets
2. Intelligently managing the other project factors to achieve
the desired Time and Cost outcomes
The problem: too many of today’s Project Managers use
only the first approach, while the second approach
is far more effective.
To help audiences of all experience levels to better understand
the difference between the two approaches, we’ve used for
many years a number of different analogies. Those analogies include
leading indicators vs. trailing indicators, front window vs.
rear-view-mirror monitoring, and managing inputs versus controlling
outputs. These analogies are crystal clear for the vast majority
of audiences.
• Top • Introducing Levers and Gauges
We’ve recently been using the concept of Levers and Gauges
as a new way to illustrate the difference between the two approaches.
Rather than giving you a dictionary definition of Lever and of
Gauge, let’s take some (non-project) examples.
Example 1
Setting: Dinner. The levers are your fork and knife. What is
the gauge? How full you feel. Interestingly, for most of us,
the gauge has about a half-hour lag. Except for chocolate,
which never registers on my gauges. Note that in this example,
there are two levers, and one must master the appropriate use
of each.
Question 1: Is the gauge important? Definitely! In fact, because
of the lag in response, we need ways to determine the trend
toward fullness if we are to be successful in managing to it.
Question 2: Can you avoid over-fullness by attempting to control
the gauge? No! You must manage the levers properly to do so.
Already we can see useful comparisons to the project environment!
Example 2
Setting: The Shower. Your gauge is the hot/cold sensation when
you test it with your hand. Other parts of your body may
have different calibration for what temperature is “right”.
This means that you adjust the findings of the gauge leaving
a bit of tolerance for your safety. What is the lever? The
faucet handle or handles. Note that single-lever handles
are easier to adjust, but are sometimes harder to figure
out.
Question 1: Again, is the gauge important? Absolutely! So
much so, that we instinctively back away from the shower flow
if we
sense a change in the water pressure—a survival skill
to avoid scalding, that depends on another gauge, that of
sensing water
pressure.
Question 2: Does everyone have the same “ideal temperature”,
or do people’s individual preferences vary? This is starting
to sound a lot like project work, but with softer measurements.
Example 3
Setting: The Stock Market. A little closer to the project
world, now that the preceding examples help show the crucial
interaction between
levers and gauges, let’s try this one. In the stock market,
an important gauge is Share Price. Can you change performance
by acting on the gauge? Despite the efforts of some day traders
and commodity traders, only with very short term success.
Question: What are the levers? Well, they would have to include
earnings growth, together with more subjective factors, such
as how well the company communicates with its stakeholders.
• Top •
Manage Levers and Monitor Gauges
By now you have probably figured out which of the key factors
are levers and which are gauges. Cost and Time are gauges. They
are often top priority factors in most projects, but you cannot
get optimum results just by controlling them. Instead, you must
manage
the levers (most of the other factors), and then monitor the
gauges to verify that your efforts are working.
Here are just a few of the many tactics our clients use to manage
the levers so they get desired readings with their gauges.
Tactic 1: Measure Scope Early, Manage it Constantly
Example: If Scope increases, and all else is constant, what happens
to Time and Cost? Clearly Cost goes up, and Time does as well
if you cannot productively add more resources.
Thus, managing Scope as a lever directly affects the project
Time and Cost. Of course, this suggests that you have a way
to measure Scope. How do you prove the project is larger, and
by
how much? Most disciplines have measurement points and methods
for managing Scope, but the measures differ radically—as
do expectations about how much change is too much.
Tactic 2: Improve Team Member Performance
Put the right people with the right skills and experience on
your highest-priority projects.
Example: Two factors, Business Analysis
and Application Experience. Based on Barry Boehm’s 2000 work1 the difference
in an Information Technology project between one team with Very
Low ratings, compared to another team with Very High ratings is about 3 times the cost!
That doesn’t even reflect the quality problems of the
Very Low team’s results. Thus delivering the same scope
costs three times as much, just based on these skillset levers.
And what do you think happens to Time?
Tactic 3: Eliminate Unnecessary Constraints
Boehm also identified an unrealistically tight deadline as
increasing Cost by 40%, just by itself. What do you think
that does to
Time? Does it impact Quality? So much for controlling
a project through its gauges rather than by managing the
levers!
Tactic 4: Eliminate Project Interruptions and Other Work Commitments
Example: Stretched-thin organizations (remember doing more
with less?) sub-optimize project performance when the interruption
rate goes beyond a certain level (which we define by the
size
of project). We’ve polled groups for 20 years, asking “what
is your mean time between interruptions”, and have seen
many organizations where the typical range is 8-15 minutes.
The result: the work may cost twice what it needed to. Want
proof? If you attempt to complete a 20 hour assignment during
the week, how much time would it take you if you came in on a
weekend? For many of us who are subject to interruptions, it
may take just 8-12 hours when done on a weekend. Check your own
work pattern here, because interruptions can also cause defects
if you are doing deep-thought work. Anyone here do deep-thought
work? I thought so.
• Top •
Why We Focus On Trying to Control the Gauges
There are many different reasons why we focus on trying to control
the Project Gauges (rather than Levers). Here is a short list
of (not necessarily very good) reasons why so many of us do so.
* It’s easier
* That is all the folks upstairs seem to be interested in
* It does not require as much skill or competence
* That’s all we ever learned
If you still insist on managing by gauges, consider including
Benefit/Cost Ratio or Return on Investment in your prioritization
process. You’ll find that it is a SuperFactor, because
it reflects a post-project aggregate measure (gauge) of the right
Scope, at the right level of Quality, delivered in the right
Time at the right Cost. Over time, paying close attention to
managing the right levers helps drive organizations to increased levels of project success. This is so crucial that we always
suggest that some Return on Investment measure be
added to the Balanced Scorecard for clients who use such measures
on projects.
Keep Your Hand on the Levers and Your Eye on
the Gauges
With credit to Dr. Lew Ireland, who coined the above heading,
today's most effective Project Managers understand the interaction
between the project levers and gauges. Specifically, they understand:
* The project levers control or influence the readings of the
gauges
* There can be very large latency between action on a project
lever and the result on the gauges
* Managing levers is pro-active; attempting to manage by
gauges alone is purely reactive
* Gentle nudging of the levers tends to work better than massive changes
in them
* It is actually far easier to manage the levers than to attempt
to control it by its gauges
* Involving the team in managing levers improves communication.
Controlling gauges reduces it
The gauges of a project are very important;
especially for organizations that prioritize them in their top
three project factors to
optimize. But this article describes one differentiating factor
that separates great Project
Managers and teams from those that are not. That factor is
whether you understand that to manage, rather than merely control,
you must manage the Levers, and monitor the Gauges.
Footnote 1: Boehm, Barry W. et.al. Software Estimation
With COCOMO II. Prentice-Hall, 2000. Although focused on Information
Technology projects, the concepts in this book (and indeed,
many of the factors) are transferable to most other disciplines
as well.
• Top •
About the Author
STACY A. GOFF, PMP, is president of ProjectExperts®, a USA-based Project Management methods, tools, consulting, and training company. A Project Management practitioner since 1970 and consultant since 1982, he works worldwide to help improve Enterprise or workgroup project productivity, quality, timeliness and cost-effectiveness.
Mr. Goff is a long-time member of the Project Management Institute, and is a founder and the Vice President 2001-2007 of asapm, the American Society for the Advancement of Project Management.
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