9618$$ $CH4 09-06-02 14:59:28 PS 127 Human Resources Management to resolve conflict. Once indisputable facts are discovered and added to the information available about the conflict, it is difficult for any of the partici- pants to disagree further, and the conflict is resolved. This type of solution produces the best resolution of the conflict for the team. The resolution of the conflict becomes clear, and there is no need for further disagreement. Withdrawal Withdrawal may be the worst way to resolve any conflict. In this type of resolution one group leaves the argument and retires. This is the same behavior that occurs when a small child says, ‘‘I don’t like the way you are playing this game. I am taking my ball and going home.’’ This does not really solve the conflict; it merely postpones it to another day. This type of resolution has a negative effect on the team. All of the team members feel badly about the end of the discussion and the withdrawal of one group. Managing Meetings Managers and project managers spend as much as 70 percent of their time in meetings. Nearly all managers complain that they spend more time in meetings than they should and that, for the most part, meetings are a waste of time. If no one likes to go to meetings and everyone feels that they are a waste of time, why do we have so many meetings? The reason that meetings are held is based on the concept that two heads are better than one, three heads are better than two, and so on. Con- tinuing to add people to a meeting improves the chances that something can be accomplished in the meeting. The problem is that as the number of people attending a meeting increases, the effectiveness of the meeting in- creases at a diminishing rate. The cost of additional people in a meeting continues to increase in a linear fashion, and very soon the benefit of addi- tional people at a meeting is less than the cost of having them there. As can be seen in figure 4-10, as the number of persons that attend a meeting increases, the effectiveness of the meeting continues to increase, but the amount of increase for each additional person is less as more people attend the meeting. The rationale for this is simple. Each additional person comes to the meeting with additional knowledge and experience. There is an ever-increasing probability that the knowledge and new ideas that this additional person brings to the meeting will already be present in someone 9618$$ $CH4 09-06-02 14:59:30 PS 128 Preparing for the Project Management Professional Certification Exam Figure 4-10. Meeting size: Effectiveness versus cost. 100 80 60 40 20 0 Effectiveness Cost Effectiveness Percent 0 1 2 3 4 5 6 7 8 9 101112131415 16 17 18 19 20 Number in Group else. In addition, as the size of the meeting increases, the interest of some of the participants may be less than desired. These less interested people may decide to have their own discussion while the meeting is going on and be effectively lost to the meeting taking place around them for periods of time. The size of the meeting is such that if there are people who simply do not participate they are hardly noticed. Of course, the cost of having these people present increases in a linear fashion. In figure 4-10 it can be seen that the cost begins to exceed the benefits of the meeting at around ten people. For most meetings, ten people is optimum. In this size group it is likely that everyone will participate in the meeting, and there will be no side discussions taking place. There are several reasons to hold a meeting. Meetings can be held for the purpose of giving out information. These types of meetings can violate the ten-person guideline. This is the type of meeting where a large group of individuals is told about a new company policy or when some sort of announcement is made. Since there is little participation in this kind of meeting, the group can be quite large. In fact, by using various kinds of media such as closed circuit television, very large groups can be reached. Most of the meetings that a project manager will have to manage are going to be discussion, idea generation, and problem-solving types of meet- 9618$$ $CH4 09-06-02 14:59:30 PS 129 Human Resources Management ings. To solve the major complaints of those attending these meetings, that they are a waste of time and that they happen too often, the project manager must make the meetings effective. Managing Meetings Effectively Before the Meeting Send out a memo giving notice of the meeting. Notifying people of a meeting by telephone is not the most reliable way to ensure that they will attend. Sending a written message will increase the possibility that they will attend. Most people are busy and are bombarded with meeting notices and telephone calls. Many times meetings are called on short notice at the incon- venience of many of the attendees. This creates a feeling of imposition on the part of attendees and does not make for a good attitude toward the meeting. The participants need to feel that they are a necessary, contributing part of the meeting. The written notice of the meeting should contain the time and place for the meeting, the subject to be discussed, the tentative agenda, and the list of those invited. In addition, any background information that can be supplied to the participants should be provided. Attendees should have time to prepare and know who is attending the meeting. They should be specifically informed if they are going to be ex- pected to make any presentation or contribute something special to the meeting. Beginning the Meeting Open the meeting by restating the objectives. It should be clear to all of those attending the meeting what the purpose and goal of the meeting is. Go over the agenda and ask for additions. This is one of the most important aspects of making a meeting effective. One of the problems of meetings is that during the meeting one of the participants is inspired to change the subject. Before anyone can stop it, the meeting has headed off in a new direction and is no longer going in the direction of its stated goals. The problem with this is not that the discussion is not useful and that the new discussion is not beneficial. The problem is that the purpose of the meeting is now sidetracked and that some of the people in the meeting are not necessary for the discussion now taking place. The use of an agenda avoids this problem. When a new and nonrele- vant discussion begins, the leader of the meeting can use the agenda to bring 9618$$ $CH4 09-06-02 14:59:31 PS 130 Preparing for the Project Management Professional Certification Exam things back on track. It is therefore important for the leader of the meeting to ask for additions or corrections to the agenda at the beginning of the meeting. Any additions or corrections made at this time will be likely to help achieve the goal of the meeting. Later, when spontaneous discussion ensues, the agenda can be used to guide it back to the purpose of the meeting. Have someone record all action items assigned and any conclusions reached. The results of the meeting need to be recorded, or they will depend on the individual memories of the participants. In particular, the agreed- upon action items by the participants must be recorded to ensure that they actually take place. The use of recording devices and video cameras generally has a negative effect on the discussions that take place in meetings. Transcribing tape re- cordings of meetings is generally time consuming and less effective than good note taking. Distribute the minutes within one day. Each meeting should be fol- lowed up by the distribution of the minutes of the meeting. Like the meeting notes, the information and the results of the meeting must be distributed to the attendees and other interested parties. This written record also ensures that everyone’s recollections of the meeting are going to be the same. Summary The purpose of human resources management in project management is to make the most effective use of the human resources involved in the project. As always, the project manager is responsible for the human resources man- agement of the project. Projects work best when the environment around them is organized in a way that is good for project management. The matrix organization is best for project management, because it allows for the flexibility necessary when managing companies on a project basis. Project teams must be motivated. Much of the research that has been recently done on the theories of motivation relate favorably to the man- agement techniques that are fundamental to project management. These motivating methods favor participative management, responsibility and ac- countability, and recognition for work done well. The concepts of job en- largement and job enhancement fit well within the project management methodology. To be an effective project manager, one must have skills in dealing with 9618$$ $CH4 09-06-02 14:59:32 PS 131 Human Resources Management the normal conflicts that occur from day to day within the project team and between the project team and those external to the project team. Under- standing the use of power is necessary for the success of the project. A project manager will spend much of his or her life in meetings. It is important that meetings be efficient and effective. Meeting agendas allow people to properly prepare for meetings and help participants focus on the subjects that they are supposed to discuss. CHAPTER 5 Risk Management R isk management is one of the most important areas of project man- agement that must be considered. Companies that want to compete with one another have adopted project management as a method of managing their companies. They have had to learn how to define and control project scope, schedule, and cost as baselines, and they have had to learn all TEAMFLY Team-Fly ® of the control elements necessary to make successful projects. But many of these companies have yet to learn to manage the risks involved in managing a project. Recall that one of the principles involved in good project management is establishing three baselines. The cost, schedule, and scope baselines are essential to managing a project. These three constraints on a project serve to define the project and give us the goals that are to be obtained. The cost baseline of the project must represent all of the cost that will be incurred in the project. The scope baseline must represent all of the work that has to be done in the project. The schedule baseline must represent all of the time that it is going to take us to do the project. When I discussed scope, I emphasized the importance of discovering and documenting all of the work that has to be done in the project. The scope of the project must also include the work that must be done to handle the work that was not expected to be necessary. When this work is included in the project plan, it affects the scope and schedule baselines as well. All of this work has some probability of occurring. In other words, work that has a probability of greater than zero but less than 100 percent of occurring is considered to be a risk. Risks can have a positive or negative 132 9618$$ $CH5 09-06-02 14:59:29 PS 133 Risk Management effect. They can produce benefits for the project, or they can produce loss for the project. The Guide to the Project Management Body of Knowledge (PMBOK)defines a risk event as ‘‘a discrete occurrence that may affect the project for better or worse.’’ Risks can be divided into known and unknown risks. Known risks are those risks that can be identified. Unknown risks are those that cannot be identified. Even though unknown risks are not identified, we can recognize the effect of these unknown risks and we can plan for them. This planning can be accomplished by looking at expert opinion and observations of similar projects, evaluating the risks that occurred there, and adjusting schedules and budgets accordingly. When to Do Risk Management Risk management must be done during the whole life of the project. In the beginning of the conceptual stage of the project, risks are identified almost without effort as the different aspects of the project are discussed. It is impor- tant that when these risks are thought of that they be recorded in a risk management file or folder so that they can be dealt with later in the project. As time goes by and progress is made on the project, the risks need to be reviewed, and the identification process must be repeated for the discovery of new risks. This must be an ongoing, continuous process. Risks that are iden- tified early in the project may change as time goes by. As the project ad- vances, some risks disappear. Other risks that were not thought of earlier will be discovered. As the possibility of the risk approaches, the risk needs to be reevaluated to be sure that the assessment of the risk made earlier is still valid. The Risk Process PMI uses the systems approach to risk management in the Guide to the PMBOK (2000). The risk process is divided into six major processes: risk management planning; risk identification; risk assessment; risk quantifica- tion; risk response planning; and risk monitoring and control. Risk Management Planning The planning approach for risk management contains the elements that are necessary to properly prepare and set the ground rules that will allow us to 9618$$ $CH5 09-06-02 14:59:30 PS 134 Preparing for the Project Management Professional Certification Exam manage the risk of the project. There are several inputs to the risk planning process. The overall project plan is a major input since it defines the stake- holders, size, complexity, and objectives of the project. It also defines the roles and responsibilities of the project team members, decision makers, cus- tomers, suppliers, and all of the others thay may be involved in the project. We also need to have the overall company strategy for managing risk. A company that is involved in products that put people’s lives in danger will be much more concerned about dealing with these kinds of risk than a company where there is small financial loss for risks that may take place. Templates may be used to assist in making up the risk management plan. The use of templates allows much time to be saved by using the already developed content of the plan. Many projects are similar in nature, and you will be able to borrow heavily from already completed or planned project risk management plans. Risk Identification The identification of the risk is very important. Each must be described in detail so that it will not be confused with any other risk or project task that must be done. Each risk should be given an identification number. During the course of the project, as more information is gathered about the risk, all of this information can be consolidated about the particular risk. The first component we need to discuss is the identification of the risk event. In the course of identifying risk events we will call upon the project team, subject matter experts, the stakeholders, and other project managers. Much of the work already done in the project will be utilized in the risk management process. Among these items that will be used are the project charter, the work breakdown structure, project description, project schedule, cost estimates, budgets, resource availability, resource schedules, procure- ment information, and assumptions that have been made and recorded. There are many ways to discover and identify risks. I will discuss several of them here: • Documentation reviews • Brainstorming • Delphi technique • Nominal group technique • Crawford slip 9618$$ $CH5 09-06-02 14:59:31 PS 135 Risk Management • Expert interviews • Checklists • Analogy Documentation Reviews Documentation reviews comprise reviewing all of the project materials that have been generated up to the date of this risk review. This includes review- ing lessons learned and risk management plans from previous projects, con- tract obligations, project baselines for scope, schedule and budget, resource availabilities, staffing plans, suppliers, and assumptions lists. Brainstorming Brainstorming is probably the most popular technique for identifying risk. It is useful in generating any kind of list by mining the ideas of the partici- pants. To use the technique, a meeting is called to make a comprehensive list of risks. It is important that the purpose of the meeting be explained clearly to the participants, and it is helpful if they are prepared when they arrive at the meeting. The meeting should have between ten and fifteen participants. If there are fewer than ten, there is not enough interaction between the participants. If there are more than fifteen people, the meeting tends to be difficult to control and keep focused. The meeting should take less than two hours. In larger projects it may be necessary to have several meetings. Each meeting should deal with a separate part of the project and the risks associ- ated with that project part. By doing this, the number of persons involved can be kept to a reasonable size, and the meetings will be much more pro- ductive. When the meeting begins, the participants can name risks that they think are important for consideration in the project. No discussion of the items listed is allowed at this time. As participants see ideas listed, they will think of additional ideas. Each new idea will elicit another from someone, and many ideas for possible risks will be listed. Delphi Technique The Delphi technique is similar to brainstorming, but the participants do not know one another. This technique is useful if the participants are some distance away. The Delphi technique is much more efficient and useful today than it has been in the past because of the use of e-mail as a medium for conducting the exercise. Because the participants in this technique are 9618$$ $CH5 09-06-02 14:59:31 PS 136 Preparing for the Project Management Professional Certification Exam anonymous, there is little to inhibit the flow of ideas. Where the participants are not anonymous, there is a tendency for one or more people to dominate the meeting. If one of the participants is a higher level manager than the others in the meeting, many of the meeting participants will be inhibited or try to show off in front of the upper level manager. All of this is avoided in the Delphi technique. The process begins with the facilitator using a questionnaire to solicit risk ideas about the project. The responses by the participants are then cate- gorized and clarified by the facilitator. The categorized, clarified list is then circulated to the participants for comments or additions. The members of the group may modify their position, but they must give reasons for doing so. Consensus and a detailed list of the project risks can be obtained in a few rounds. One of the major drawbacks to the brainstorming technique is avoided in the use of the Delphi technique. Peer pressure and the risk of embarrass- ment from putting forth a silly idea or one that could be ridiculed by others is avoided because the participants are not known to one another. This does not come without cost. The facilitator must do much more work for the Delphi technique than the facilitator in a brainstorming session. It is neces- sary for the facilitator to frequently nag the participants, who may procrasti- nate in returning their responses. There is also some risk involved in using this technique. The facilitator is required to analyze and categorize the inputs from the participants. This means that the facilitator impresses much of his or her opinion on the group. Nominal Group Technique In the nominal group technique, the idea is to eliminate some of the prob- lems with other techniques, particularly the problems associated with per- sons’ inhibitions and reluctance to participate. In this technique a group size of seven to ten persons is used. The facilitator instructs each of the partici- pants to privately and silently list his or her ideas on a piece of paper. When this is completed, the facilitator takes each piece of paper and lists the ideas on a flip chart or blackboard. At this time no discussion takes place. Once all of the ideas are listed on the flip chart, the group discusses each idea. During the discussion, clarifications or explanations are made. Each member of the group now ranks the ideas in order of importance, again in secret. The result is an ordered list of the risks in order of their importance. This process not only identifies risks but also does a preliminary evaluation of them. [...]... efficiently and effectively Before the expert interview is conducted, the input information must be given to the expert and the goals of the interview must be clearly understood During the interview, the information from the expert must be recorded If more than one expert is used, the output infor­ 138 Preparing for the Project Management Professional Certification Exam mation from the interviews should be... rolling our die The term event means the set of all the possible outcomes that could occur These events of rolling the die are considered to be mutually exclusive 144 Preparing for the Project Management Professional Certification Exam A mutually exclusive event is one where the occurrence of one of the possibil­ ities eliminates the possibility of the others In our rolling of the die, all of the possibilities... $17,000 The decision not to cut the stone yields $95,000, the $100,000 value of the uncut stone minus the $5,000 fee for the inspection The decision is made to not have the stone cut after the inspection predicted shattering of the stone If the inspecting company predicts that the stone will not shatter, you still must make the decision whether or not to cut the stone If the decision is made to not cut the. .. possible for given projects In their specific form, they are risks that have occurred in the particular types of projects that a company has worked on in the past Frequently, certain customers and stakeholders have particular risks associated with them that can forewarn the manager of the new project Analogy The analogous method of identifying risks is quite simple From the lessons learned and the risk management. .. $100,000 when the diamond is cut, it will not shatter If the prediction is that the diamond will shatter, then the diamond will shatter 95 percent of the time Let’s say that the diamond itself has a 20 percent chance of shattering, as before The decisions to be made are: Should you pay for the prediction, and should you have the diamond cut? The decision that must be made is whether to pay for the inspection... and 80 percent of the time the inspection will predict not shattering Of course, if the inspection predicts shattering, there is a 5 percent chance that the diamond will not shatter when cut anyway If the inspection predicts that the diamond will not shatter, there is a 1 percent chance that they are wrong and the diamond will shatter anyway 154 Preparing for the Project Management Professional Certification... representation of the process involved • Easy to generate • Many computer tools available for them • Sometimes misleading • Can be time consuming happens Since risk management must take place many times during the course of the project, there needs to be a way of organizing and documenting the risks In the beginning of the project the risks may only be identified Later in the project, additional information... stone, the yield is $95,000, the $100,000 value of the uncut stone minus the $5,000 fee for the inspection If the decision is made to cut the stone, the expected value is $242,600 If the stone is not cut, the value is $95,000 If the stone is cut, there is a 1 percent chance that it will shatter, yielding $5,000 There is a 99 percent chance that the stone will not shatter, yielding $245,000 The expected... large uncut diamond of 6 carats The diamond cutter says that if the diamond is cut into small stones, the aggregate value of the stones will be $250,000 If the diamond is cut into one large stone, the value will be $100,000 The problem associated with cutting the diamond into smaller stones is that there is a 20 percent chance 152 Preparing for the Project Management Professional Certification Exam Table...Risk Management 137 This process reduces the effect of a high-ranking person in the group but does not eliminate it, like the Delphi technique The nominal group technique is faster and requires less effort on the part of the facilitator than the Delphi technique Crawford Slip The Crawford slip process has become popular recently The Crawford slip process does not require as strong a facilitator as the . 09-06-02 14: 59:30 PS 1 34 Preparing for the Project Management Professional Certification Exam manage the risk of the project. There are several inputs to the risk planning process. The overall project. 9618$$ $CH5 09-06-02 14: 59:29 PS 133 Risk Management effect. They can produce benefits for the project, or they can produce loss for the project. The Guide to the Project Management Body of Knowledge. can use the agenda to bring 9618$$ $CH4 09-06-02 14: 59:31 PS 130 Preparing for the Project Management Professional Certification Exam things back on track. It is therefore important for the leader