Communicating the Organization's Direction: The Missing Ingredient

The average worker could not tell you the vision of the employer.

To some degree, the average worker can perform just fine without knowing the mission and goals of the business. However, knowing the purpose of the work can guide decisions made in the course of the work. Perhaps more importantly, having a known, defined purpose can motivate the worker by providing a roadmap to the work's contribution. It provides a personal connection to the work and to the company. This, in turn, improves performance and retention.

Leadership can improve overall performance by communicating the vision, mission, and goals of the business, as well as the specific objectives of each project. (To cut down on wordiness, I'm going to combine all of those messages and call them the "direction" of the business.)

This topic could take up a whole book, but I will address a portion that I think leaders tend to forget. The specific methods and tools used will vary during the lifecycle of a project. For that reason, I would recommend organizing a more complete description of the topic around process groups or project phases:

• Project selection
• Project initiation
• Project planning
• Project execution
• Project monitoring and control
• Project closure

Defining the direction is part of creating the business plan. Any responsible business owner will create most of those materials and update them regularly. From there, communicating the direction requires breaking each section into a PowerPoint presentation, asking lower-level leadership to give it visibility, putting it to work in the organization, and setting up systems of accountability.

Businesses commonly forget to ensure that the elements of the business direction flow down to projects. Leaders present and promote the direction, but they also need to communicate it through actions that create the processes and provide the tools for carrying out the direction and controlling its implementation.

Just as the business needs to continuously review and refine the direction, the projects need to ensure alignment with the business direction. For example, many project managers set the contract as the highest level of requirements. However, many decisions made within a project depend on the business direction.

Leadership can take one step to communicate business direction by empowering Project Scope Management. They can do this by making available a good Requirements Management System (a tool such as DOORS or CORE). The project managers should then include the business direction's documentation as the top level of each project's requirements. During the project lifecycle, the project can ensure that decisions support the business direction and all requirements trace to the business direction.

Many leaders focus on communicating business direction through presentation. However, they must also communicate it through action. Obviously, actions include specific soft-skill behaviors such as demonstrating the importance of meetings by prompt attendance. But they must invest in resources that empower their teams to use direction as a tool and to use it as the measuring stick of performance.

Project Management and Open Communications

Project Managers need to guard against setting up an environment where bad news never reaches them. They need to praise and encourage those who communicate risks before they become issues, issues before they become problems, and problems before they become project failures.

Some managers remind me of the Clinton trial in the Senate, following his impeachment in the House.

The Senate set up a rule requiring Ken Starr to keep all the records and evidence in another building. Bringing it to their offices without an invitation would have violated protocol.

Then the majority of senators refused to go view the evidence. A few who did view it said they came away weeping, and the rest (having refused to view the evidence) said that they lacked evidence sufficient to convict.

Does your comfort zone tempt you to maintain willful ignorance? Does your character allow reliance on plausible deniability? The PM has accountability for project success, which any lack of awareness may bring about; but that accountability extends to achieving success ethically.

 

I wonder:  Do PMs ever include ethical lapses as project risks?

ROI on Subsidizing Professional Memberships

What Return On Investment (ROI) does a company receive by paying the professional membership dues or educational expenses of employees? For example, if a company pays the annual PMI or INCOSE membership dues, what dollarized benefit or ROI does it receive?

[Sarcasm="On"]

I only have one data point. When the company invests zero dollars in its employees' growth, the investment:

• Creates zero expansion of its pool of outside SMEs
• Creates zero growth of workers' skills
• Encourages zero engagement in the work
• Subsidizes zero creativity
• Suppresses crazy ideas from professional cross pollination

On the positive side, such an investment strategy:

• Discourages annoying attributes such as pride and overconfidence
• Prevents exposure of its products, services, expertise, and industry leadership to the public
• Encourages turnover of unengaged and obsolete employees
• Ensures that personal connections will not interrupt hiring managers' time reading resumes.

[Sarcasm="off"] Employee Focus

If the company pays for schooling, it might be possible to argue that the ROI of membership fees is even greater. You will not only learn from presentations during meetings, but the meeting time per membership dollar will be a multiple of classroom time per tuition dollar, you will spend countless hours studying toward PMP, CSEP, or other certifications, and you will bring all the other intangible benefits, too.

If the company pays for books for classes or for reference, you can also list the values or prices of the numerous downloadable materials such as the PMBOK Guide (hard copy was $66 for the fourth edition). 

If the company reimburses you for certification exams, then you can list the discounts on exam fees. For example, if you join PMI before registering for the PMP exam, the discount on the exam pays for the first year's membership.

As an alternative to paying for dues directly, a company can reward employees through raises or bonuses when they see positive results. The flaw in a reactive strategy is that it fails to model the trust and loyalty that management expects from employees and only rewards tangible, directly measurable, short-term results.

Wider Perspective: It's Your Loss, Boss

Businesses lose a lot of money by failing to align their talent management with their business strategies.  A study by the Project Management Institute found that managing the talent pool cuts risks by 50% (1). Cutting project risks cuts costs, improves quality, shortens schedules, and boosts morale.

PMI estimates that active talent management results in 14% more project success -- meaning that projects reach all success criteria. If you focused on individual success critera, the numbers would be much higher. Would it be worth, say, a hundred dollars per employee to improve your success rate by 14% on a million-dollar or billion-dollar contract?

Turn the question around and ask, what does the company lose if it does not subsidize professional memberships? Just go through the issues above and you will see issues of obsolescence, disengagement, turnover and the resulting loss of braintrust, as well as disengagement of the company itself from its industry.

According to the PMI, industry will annually create 1.57 million new project management roles, globally, each year until 2020 (2) and 80% of organizations already report struggling to find qualified managers (3). Employers that fail to encourage employee growth will lose to proactive competitors.

Sample Calculation

Remember that you obligate yourself to whatever you list.

Some people will get the membership, add it to their resumes, and then never think about it again until the renewal notice arrives. Others would will join regardless of whether the company reimburses them.

On the other hand, if young employees find mentoring and take an early interest in expanding their networks, social skills, and professional skills, how would you calculate the exponential growth in their value to the company?

But... we have to try.

One source measured the increased productivity multiplied it by the hours saved and the labor rate.

They looked at the cost incurred by a project manager in previous projects under the charging categories for estimation, planning, resource, scope, schedule, and customer management. They then compared the numbers with the same charges in a current project.

The manager spent 27 hours less per year. This did not include the higher level of tasks or the higher quality of performance. Using a very conservative $100/hour, the savings appeared to be $2,700. A $130 membership spent corellated to an ROI of 20 times.

Factors such as the employee's learning curve could have contributed to the ROI. However, even with such factors accounting for 90% of the gain, the ROI was still 2:1.

If you consider that an employee creates value greater than the rate of pay (otherwise, why employee him?), then that 2:1 ROI leverages back into a higher ratio again; and the higher the level of the employee, the greater the leverage.

Even ignoring the many difficult-to-measure benefits, subsidizing membership fees yields a far higher return than most company dollars return.

References

1. Pulse of the Profession (TM) In-Depth Report: Talent Management. Project Management Institute. 2013.

2.  Ibid.

3.  Project Management Talent Gap Report. Project Management Institute. 2012.