Entrepreneurial Business Success using Project Management

Sherrone Lobban

CEO

DPM International Ltd.

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PROJECTS AND MANAGEMENT

The tagline of the Project Management Institute (PMI) is ‘Making project management indispensable for business results.” This tagline is not only PMI’s mission but is a reality of today’s business-life. More than ever, project management has become an indispensible management tool. Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements’. (PMBOK® Fourth Edition). Project activities are temporary in nature, and usually produce a unique product, service or results. Project management has been called a science. Projects must not be confused with operations, which are ongoing rather than temporary and therefore have no defined end. Learning the science of project management provides the foundation for the art of leadership (Boston University Corporate Education Center, Project Management Fast Track course).

So now that we know what project management is and the type of activities that make up a project, how can that help the bottom line? By adding project management principles to our everyday projects we can significantly reduce risks and business failure. On any given day, entrepreneurs undertake projects. For example a company that offers business consulting services develops a new strategy for each client they serve; and a company that installs office partitions runs a different project for each office that they outfit. Each of these projects has a defined start and end, with unique features and in some cases unique pricing. While projects occur in businesses every day, they usually fail because the entrepreneurs or managers assigned to that portfolio do not understand how to apply systematic project management tools and techniques to these business processes. This does not mean an in-depth and technical knowledge of project management is required. What is required is that you understand the science of the process you are executing; I guarantee that you will love project management for it!

Consider this article as a course in project management for non-technical project managers. Due to the space allotted, I have deliberately avoided getting into the formal stages. More complex and larger projects require a technical grasp of project management. A project begins with an opportunity to do something. It is Initiated Planned, Executed, Controlled & Monitored and then finally Closed-Out. These are the 5 process groups of project management, with Planning being the longest and most critical stage. Within these stages, several things occur, such as scheduling of time and resources, budgeting, costing, procurement, human resource planning etc.

CASE STUDY IN THE LIFE OF AN ENTREPRENEUR

Let’s learn the value of project management by following a day in the life of an entrepreneur with and without project management.

Sandra Mack is the CEO of SanMac Events a new and innovative consulting company, that offers events planning services that are quite high-impact. Sandra gets a request from Jon, the marketing manager of Event Leaders Ltd., a leading events management company. In the email, Peter explained that he wants to outsource a bit of his responsibilities on a region-wide project to SanMac. The project entails rolling out Cricket World Cup pre and after party events in 10 Caribbean islands. Sandra is very elated, as this would be their biggest project to date. Sandra immediately told her small team of 3 about the call and that she was going for it. She then replied to Peter, telling him that she is on board and will meet him the next day. In the morning, Sandra met with Peter alone. In the meeting he handed her a sheet of paper listing the things that he wanted to outsource to her. This was a piece of cake for Sandra. After an intelligent pause and some chit chat, Sandra asked Peter “so, when do we start?” They agreed on a payment of 50 million Jamaican dollars, and Sandra gleefully signs the dotted line, confirming that she would roll out several parties in 3 months for a sum of $50 million. She did not sign a formal contract with exit clauses etc.

Sounds familiar? Sandra was excited, but did she stop to consider whether or not the job was aligned to her company’s objectives and brand equity? To assist her in making this decision, Sandra should have ensured that before she starts, she gets a full understanding of the objective of the project. These activities are a part of the project Initiation. OK let’s say this job is aligned to SanMac’s objectives. Did Sandra do a budget estimate to ensure that the $50 million could cover the job and make her a profit? There are several ways to estimate budget and costs (2 different activities) in project management. In addition, she made a critical blunder of excluding her team from the initial stage, i.e. when the project was being initiated. Sandra ‘told’ her team, she did not ask for suggestion. With project management skills, Sandra would have known that team participation is critical throughout all aspects of her project. The team members are critical stakeholders and play an integral role in ensuring project success

OK, so now Sandra is ready to start the project and has given her team their various assignments. During project Execution, Peter calls her to say his client would like her to add pre-parties, for Ministers of Government, to the Barbados and St. Lucia legs. He wants her to do it with the same budget, produce the same high-impact quality and complete all parties within the agreed timeframe. Pre-parties for Barbados and St. Lucia were never on her list. Sandra is not sure how to handle this new request because she does not have the additional resources. This contract is a big job which will continue to open doors for her even after it’s completed. What should she do? Well, Sandra would not be in this situation if she had applied project management principles such as: negotiating a Contract with reasonable terms; knowing her stakeholders; and defining the scope of the project, i.e. what is involved and what is excluded. Peter has increased the project scope by adding additional features. In project management we know that an increase in scope will affect the budget, time and quality of the results. Sandra may be unable to avoid including these additional features to the project because the document she signed does not offer her much protection.

She decides to do the extra parties, but the quality may not be as good because she has already exhausted a significant portion of the budget. The danger in this is that the quality of Sandra’s product will be less than anticipated and she will not complete the project as scheduled. In addition, her profit margin may be reduced or at worst be totally eroded. The client will be dissatisfied and Sandra’s reputation for high-impact, high-quality events may be negatively affected.

If you find that you often think that your clients ‘don’t know what they want’ ‘is hard to please’, then maybe your projects are not being planned properly. After completing a project, your answer should be yes to all the questions below:

• Is your client very satisfied?
• Are you and your team satisfied with the result?
• Was the job completed on time?
• Was the job completed within budget?
• Would that client refer you to someone else?

To prevent loss of revenue and business opportunities it is important that entrepreneurs and executives manage their time, human and financial resources effectively and with acumen. Project management can act as a springboard for both managers and staff in implementing business ventures. This will result in not only impressing your client but also maximizing profit whilst doing so.

© Sherrone Lobban

Excerpts of this article taken from ‘Project Management for Entrepreneurs’ DPM International Executive Seminar Series