04.27.06

Key Indicators, How they will Benefit your Business

Posted in Operations, Business at 10:36 am by admin

Key Indicators allow you to track the health and growth of your business. By deciding what values are critical, then measuring them over time, you can determine exactly where you are in your progress towards your business development goals.

Most business owners would argue that they have a good feel’ for their businesses. This is probably true but it is not sufficient to be successful. The Key Indicators in your business need to be defined and a schedule established to track and measure your progress towards them over time.

Key Indicators can be used to track both measurable and implied areas of your business.

Measurable Key Indicators are values that you can actually calculate or determine by looking at the operations of your Business. Typical examples include: - Net Profit, Growth Rates, Sales Person Calls and Production Rates etc.

Implied Key Indicators are values where you establish the best case and worst case values and then assign a measurement value at a point in time using your judgement. These values may not be able to be determined by looking at the operational metrics of your business. It may be useful for you to document exactly how to arrive at a value. Typical examples include:

- Customer Satisfaction, Market Leadership and Employee Moral etc.

To begin tracking Key Indicators in your business:

1) Consider where you are and where you want to be.

2) Determine the areas that need tracking in order to reach your Business Development Goals.

3) Determine the range of values you will use to measure a Key Indicator, these may change as your Business Develops.

4) Develop a description for the Minimum and Maximum values that you will use to measure the Key Indicator (This will assist you when measuring the values).

5) Measure the current value of the Key Indicator.

6) Schedule a task for the regular measurement and evaluation of your progress with the Key Indicator so you can track where you are over time.

You should share the measurement and evaluation responsibilities of Key Indicators with employees and managers in your business. You will find that once you start using Key Indicators to set the goals and parameters of your business, you and your employees will become aligned and begin working towards achieving your Business Development Goals.

Be bold but realistic in setting your Business Development Goals. By defining and then measuring Key Indicators there is a good chance you will reach and exceed what you have set as the best case scenario.

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04.20.06

Managing Project Risks (Part 2): 10 Major Mistakes Your Team Can Avoid

Posted in Operations at 5:10 pm by admin

Does your organization see every opportunity as a “must-win” project, even when it’s a poor fit for your in-house talents? If so, this is one of several viewpoints that can blind your company to potential problems ahead. In Part 1 of this series, we explored how to recognize six common project traps. Now in Part 2, we’ll review 10 major mistakes to avoid (or risks to flag) when choosing, estimating, and staffing your projects.

First, it’s important to recognize that your organizational culture sets the tone for how you approach projects. For example, does your company always expect people to do more for less? Does the management routinely insist on or agree to unworkable schedules? Are team members encouraged to underestimate their realistic efforts? If so, these are signs that your organization may have a “must-win-at-all-costs” view of projects. You may want to consider how idealistic but impractical expectations could set the stage for project failure.

In any case, if your business faces challenges with project budgets, schedule, quality, or features, try asking these 10 questions the next time you’re considering a project:

1. Is the project non-compelling or a bad fit for the project team?A bad fit means that it doesn’t fall within the general professional or technical arenas in which your company has accomplishments or your colleagues have expertise. Note that if your projects normally entail working with subject matter experts who would supply the information you need, this is not as great of a concern.

2. Will the project scope entail operating in unfamiliar territory?Even if it’s a reasonable fit, if a project involves requirements your team has never worked with before, you could be overly optimistic in assuming everyone can come up to speed quickly enough to be successful on the project. You may need to seek outside expertise, although this can introduce its own risks (see #6-7 below).

3. Are project requirements, such as product features, complex?A project that requires many complicated features to interact correctly vastly increases the potential for problems. One risk strategy could involve agreeing to phase in and test the complexity over time. Another could be to negotiate a reduction in the number or difficulty of the features to be completed.

4. Are the requirements pitted against an aggressive schedule?Time limits of some sort exist on almost every project, and drive nearly every other project expectation. Will there be enough time to implement the requested features at the desired quality level? If not, you may want to negotiate a longer schedule, agree to reduce the requirements, or phase in some features later. You could bring in more people, although this will involve more coordination.

5. Are too few personnel and resources available for the project?Project managers routinely lose sleep at night over what would happen if key project members were to leave. Or if the funding or resources were to get chopped or significantly delayed. It’s one thing to have snafus occur later in the effort, but it’s another to start off unrealistically. So try not to underestimate your needs.

6. Will coordination with many different collaborators be needed?Involving many people means complex hand-offs. If your project will include client or third party collaborators, how will people interact? Should all parties remain in direct communication? Or should each group have a single point of contact? Also think about the division of work, and each group’s responsibilities to the others.

7. Are the primary collaborators unfamiliar to the project team?If it does become necessary to recruit one or more new contributors, will you be able to verify whether they can do the job? If the unfamiliar parties have stretched the truth about their capabilities, you may be in for trouble. If there’s a way to have them prove themselves first, that’s ideal - or else have a contingency plan.

8. Are project team members discouraged from raising concerns?Before and after the project starts, team members will identify all kinds of challenges. Do you want people to raise red flags when they see potential problems, or do you prefer everyone to keep quiet, maintain a stiff upper lip, and work 24/7 if needed? The team culture will determine whether the members verbalize and address in a timely fashion the many pitfalls that can appear along the way.

9. Are there insufficient review and test cycles in the schedule?Allocating enough time for review and testing iterations commonly presents a challenge. Regardless of your initial planning, if project delays begin to add up, what will people want to cut? Can you afford to reduce testing and still deliver quality?10. Are there no standard protocols for managing scope changes?When the inevitable “add-on requests” materialize, consider how they’ll affect the project. Unless you have a tool, such as a project change request, to adjust the official budget and time frame, you’ll always be at risk for cost and schedule overruns.

If you answered “yes” to one or more of these questions, it means that each is an area of risk that you’ll need to manage to ensure project success. Either create a workable plan for managing these risksor consider whether pursuing the project is in the best interests of your organization.

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