Last time, we discussed the importance of advance planning when you're facing a large project. This time, we'll look at key challenges related to keeping that project on track once work has begun. Successful implementation requires you to track and document progress and to maintain the right priorities. This article shares insider tips to help you meet these challenges.
Obviously, preparing the plan is not the same as completing the project itself. Even though you've gone through a comprehensive advance planning process, you'll face many challenges after work has begun. For this reason, it's important to stay flexible-your plan may have to change as the situation evolves. This leads us to a major dilemma faced by design firms: from a creative standpoint, you must always remain open to change and discovery; however, as a smart businessperson, you also need to keep each project within its approved budget and schedule parameters. As every experienced design professional knows, keeping a large project on track is not easy to do!
Implementing the project plan requires collaborating very closely with all team members. It also requires monitoring progress at key checkpoints to see that objectives are being achieved. This process of monitoring performance requires you to prepare progress reports on at least a weekly basis. In general, big projects need much more documentation than small projects. It's essential for busy design firms handling large projects to have an efficient system in place for tracking the labor and expenses that are going into each project. The system has to make it easy to generate work-to-date reports that are current and accurate.
Reports must also be produced with varying levels of detail. Those with the most detail are for you and your team. When a progress report is shared with a client, it should only be a summary-it's not a good idea to distract clients with too much detail. Reports are important tools for demonstrating progress and managing client expectations. Providing timely and reliable summaries to the client is an essential aspect of good account service.
Keep in mind that project summaries shared with clients should show gross amounts only. Most project tracking software gives you the option of viewing financial information at net or at gross. Net is the internal cost to your studio (labor at payroll rates plus purchases at whatever amounts were paid to vendors). In contrast, gross is the external billing value-the total that will be shown on your invoice to the client (labor at full billing rates plus purchases to which a markup has been added).
Within the design team, an effective tracking system helps you stay within the approved scope of work and maintain the right priorities. To keep priorities straight, many people find the following concept quite useful:
This concept is named after Vilfredo Pareto, an Italian economist and sociologist. Some people also refer to it as “the 80:20 rule.” In 1906, Pareto published a study of the distribution of income in Italy. Not too surprisingly, the data indicated that most of the nation's income went to a small portion of its population. This observation of unequal distribution has led to a general management concept. It holds that, in most groups, the majority of items will have comparatively little importance, while the truly significant items will be in the minority. This is often the case with large design projects-just a few items are the most significant in terms of their effects or consequences. Because of this, it's vital for project managers to maintain clear priorities and concentrate the team's efforts on the most important elements. It's all too easy to lose focus and go off on tangents, squandering time and effort on insignificant items that won't have a noticeable impact on the ultimate success of the project.
Watching the Budget
Now we need to expand upon a topic mentioned briefly in Part One of this article: visualizing the actual time and materials being expended. On a large project, it's essential to track the speed at which the budget is being used. Most small projects have tight schedules. Although they're stressful, they're beneficial in that they force you to stay focused. In contrast, large projects tend to have extended schedules, which make it much easier for the team to slowly creep over budget without even being aware of it.
One technique for watching how quickly the budget is being used is to expand your Gantt chart, as we discussed earlier. A second set of bars can be added to show current budget status. Gantt charts are specialized-they were specifically developed for planning and tracking projects. However, there are two additional ways for you to visualize the total amount of time or money being expended: standard bar graphs and line charts.
An ordinary bar graph is a great way to display the differences between groups of data. Typically, information is presented chronologically as a series of horizontal bars or vertical columns. The lengths of the bars are in proportion to the values of the data they represent. Bar graphs can show resource usage in specific weeks, such as dollars spent or hours worked. They are easily produced with any common spreadsheet application.
These are commonly used to show increases or decreases in activity from period to period. The line connecting the series of data points tends to jog up and down, leading many people to call these “fever charts” like those seen in hospitals. For design projects, however, line charts are most useful for showing cumulative totals, which means that the connecting line will only move upward. A line chart of cumulative performance reflects the steady accumulation of costs over the lifetime of the project. A second line can be placed on this chart to visually compare the estimated cost of work scheduled to the actual cost of work performed. These line charts can be produced using any standard spreadsheet program.
Both bar graphs and line charts can help you keep an eye on your project's burn rate. Burn rate is an investment term for how quickly a limited amount of cash is being spent. Managers in startup companies calculate their burn rate in order to understand how much time they have before they need to achieve positive cash flow from operations or obtain additional funding. In project management, the term is used to describe the rate at which the overall budget is being used. If you're working under a fixed-fee contract, all work must be completed before the budget runs out or else you'll begin to erode your planned profit.
To stay on top of a fast-moving project, many design firms maintain a chart of running totals and post it in the workplace for the team to see how quickly the budget is being used. The chart might show week-by-week totals, cumulative totals, or both. Sometimes it is helpful to simplify how the original plan is presented so that it can be plotted as a straight line. This is done by taking the total budget and dividing it by the total number of weeks in the schedule. This would seem to imply that the level of activity is expected to be exactly the same in all weeks. We know, of course, this won't be the case, but showing the budget as a straight line makes the chart much easier to read when actual performance data is added. The uneven line representing actual work will move about in marked contrast to the straight-line budget.
This charting process requires easy access to current data from your company's project tracking system. The raw numbers available to you from the database can be either weekly or cumulative-it's a simple matter to calculate one as long as you have the other. If you're producing a weekly bar graph of dollar totals, another level of detail can be shown by building each bar in layers representing the subtotals for staff, freelancers and materials.
Each time you prepare an update, you're watching to see if actual totals have begun to exceed the plan. Occasionally, an accelerated burn rate is not a problem-it could indicate that the project is ahead of schedule and all work will be completed early. If a project stays significantly ahead of schedule, you might even be able to reallocate unused money and resources.
Most of the time, however, running ahead of budget is a bad sign. It usually indicates one or more of these classic problems:
- Early estimates of the time and money required to do the work were inadequate.
- Project requirements were not defined accurately enough at the start.
- Work has expanded beyond the agreed-upon scope.
- Design flaws, production difficulties or technical challenges have emerged.
- A problem has developed with a key vendor.
If you see that actual expenses are beginning to exceed the budget, you must intervene to reduce the burn rate. In design firms, several tactics are common:
- Coaching the team for improved efficiency.
- Narrowing down the number of alternative creative directions being pursued, if the project is still in the early phases.
- Reducing the size of the team if there are individuals who are not being fully utilized
- Being more diligent about generating change orders
This last point is an important one. It's not unusual for design projects to fall behind schedule because of additional client requests. Anything that's outside the original scope of work should trigger a change order. This gives you a chance to increase the budget and possibly renegotiate deadlines.
If overruns are not due to client changes, however, it's unlikely that additional funding will become available. If you negotiated a fixed-fee contract and now you're running out of money before the agreed-upon work is complete, it might simply mean that you under-budgeted. In such a case, you may have no option but to carry the project through to completion without additional compensation. As a businessperson, of course, you must be very cautious about this-accepting a reduced profit margin on too many projects will jeopardize your firm's long-term viability.
Earned Value Management
The amount of analysis you do and the formality of the reports you produce should, of course, be scaled to match the size and complexity of the project at hand. At the upper end of this scale is something called earned value management. It's an approach for measuring forward progress that's used by many engineering firms and software developers. Earned value is defined as the value of the useful work completed up to any given point in the project. Analysis of earned value is based on schedule performance, cost performance and technical performance. Let's look briefly at each one.
This is management of the time budget. Detailed Gantt charts are used for tracking labor hours and keeping an eye on variances. The goal is to know whether the project is behind or ahead of schedule and whether it will be finished on time.
This is management of the financial budget. Detailed line charts are used for planning and tracking the monetary aspects of the work. Usually there are two sets to show both net cost and gross billing value. This data is continually updated and analyzed to determine whether the project is over or under budget and to calculate the size of any variance. On an ongoing basis, you need to know if there's enough money left to complete the work.
This third metric moves us into a new area that we haven't discussed before. Technical performance means measuring the volume of work accomplished-the physical percentage of completion at a given moment. This represents a significant challenge for design firms because progress on creative problems is very difficult to quantify. When asked how much progress has been made on the scope of work, most design teams will respond in a purely subjective way-a number will be pulled out of the air, like “concept development is 50 percent complete.” In contrast, earned value management attempts to measure progress objectively. This requires you to quantify the scope of work by breaking the project down into a series of specific milestones and then assigning a numeric value to each one, either in dollars or percentage of completion. Some milestones might have much higher values than others. Each time you prepare a progress report, the farthest milestone that has been reached determines the percentage of work completed as of that status date. Once you have an accurate measure of how far behind or ahead the team is on scope, you can compare that to the cumulative totals for schedule and cost. (One note of caution: since tracking technical performance requires you to quantify the project plan and assign predetermined values to milestones, it's not always a good match to research and discovery projects where the work itself will take you in new directions that cannot be foreseen.)
With these three metrics as a foundation, earned value analysis goes on to calculate an
“estimate at completion” (also called a “forecast at completion”). This is a projection forward of the expected total cost and expected total schedule, based on actual performance as of the status date. This allows you to estimate what the variance will be at completion-the final difference between plan and actual.
This real-time trending gives you early warning of performance problems on large projects while there's still time for corrective action. The earlier a discrepancy is identified, the sooner you can act to remedy the problem. However, these mid-course corrections cannot be accomplished by the project manager alone-they require the involvement and commitment of the whole team. For that reason, earned value metrics are used as a scoreboard for the team. Variances are shown as percentages or ratios. Areas of concern are highlighted.
In a large studio with multiple teams, these metrics are also shared with the principals of the firm. Having current information on all active assignments allows senior management to focus their attention on those projects encountering difficulties and provide assistance as needed in the form of added support or mentorship.
What About Quality?
We've talked a lot about managing time, money and quantity of work accomplished. At this point, you may be asking yourself: “What about quality?” It's important to note that quality control is a separate challenge. Project tracking systems have no provision to measure quality, and good numbers from a database are no guarantee of creative success. Good design requires a strong creative leader. He or she must bring the right people into the team, inspire performance, maintain high standards and effectively guide the group through an iterative, problem-solving process. For a more detailed discussion of design team roles and dynamics, please see the earlier article about teams (November 2006).
OK, you took on a large project and kept it on track. Now the end of work is drawing near. Here are a few quick tips for wrapping things up successfully.
Handover to Client
As you near the conclusion of a large project, take time to prepare both the team and the client for a successful handover of the finished work. Especially on projects such as websites and corporate identities, it's important to formalize the process of transferring responsibility. The client may need preparation and training to use the solution that you've developed.
When you've delivered the last portions of your work, conduct a wrap-up meeting with your client to assess satisfaction. It's a final opportunity for the client to identify any defects and ask for corrections. It's also a golden opportunity for you to discuss additional needs that have emerged and to propose follow-up projects. Closing the loop in this way can help you to convert a successful one-off project into an ongoing relationship. The process of closing the loop with the client was discussed in an earlier article on marketing (April 2004).
Final Internal Review
After client satisfaction has been assessed, it's smart to conduct an internal evaluation of the project with your team. Some firms refer to this as a post mortem because it takes place after the project's completion. However, a more optimistic term is post partum.
Hold this final discussion as soon as possible, while everyone is still available and all of the details of the project are still fresh in everyone's mind. Review the process as well as the outcome. Get the full team to participate so that all phases of the project and all professional perspectives are represented. Be honest in examining both the good and the bad. However, if the project did have some problems, be careful not to let the discussion devolve into a finger-pointing session. Handled properly, this is a valuable opportunity for the team to learn from any mistakes and agree upon improvements that will benefit future projects.
Most of the issues that come up in this discussion will relate to specific details of planning and managing this one project but, occasionally, company-wide issues might surface as well. Start the review with some questions about the project's process and logistics:
- What went well? Why?
- What did not go well? Why?
- What was missing or not foreseen?
- What should we change for the next project of this type?
- What project-related action items are now necessary? By whom and by when?
Next, expand the discussion to address any company-wide issues that have surfaced:
- Based on what we've just learned, should any changes be considered to our company's vision and business plan?
- Are any improvements needed to our overall systems and processes?
- What future knowledge and skills will be needed to respond to emerging opportunities?
- What are the related staffing and training implications?
- What company-wide action items are necessary? By whom and by when?
Document the results of this final assessment and follow up diligently on the action items that have been assigned. If the project was successful, you might also consider adding it to your design portfolio as a case study. As soon as that's done, you can archive the final creative files. Separately, be sure to save any client approvals and other key information that might be needed later to resolve any financial or legal disputes.
If your work on the project produced any new forms or reference materials that could be useful to other projects in the future, store them in an easily accessible format and location. Many design firms maintain a binder of general procedures, a set of templates and forms for project planning and tracking and reference files about vendor capabilities.
If you work in a large firm, you should also think about ways to publicize your project review findings internally. One of the best ways to disseminate the new knowledge is to present an end-of-the-day “show and tell” to the rest of your company's staff.
Conducting a final evaluation after each major project is essential for creating a culture of learning. Over time, it helps you to improve your personal skills and evolve best practices that will contribute significantly to the success of your firm.