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Monthly Archives: December 2012

Arbitration has a long history

Posted on December 31, 2012 by | 1 comment

As a graded Arbitrator, born a Kentish Man in the Western part of the County of Kent (UK), I was interested to read about a project to put on public display in Rochester Cathedral, the Textus Roffensis currently held in the archives at Rochester Kent.

The Textus de Ecclesia Roffensi per Ernulphum episcopum (The Book of the Church of Rochester through Bishop Ernulf), is a mediaeval manuscript that consists of two separate manuscripts that were written between 1122 and 1124, some 60 years after the Norman conquest of 1066. One part is the legal records of the Church.

From a legal perspective, the interesting part is a recording of the Saxon legal codes used in the Kingdom of Kent prior to the Norman invasion:

  • The Law of Æthelberht is a set of legal provisions written in Old English, probably dating to the early 7th century. It originates in the kingdom of Kent, and is the first Germanic-language law code. It is also thought to be the earliest example of a document written in English.
  • The Law of Hlothhere and Eadric is an Anglo-Saxon legal text. It is attributed to the Kentish kings Hloþhere (died 685) and Eadric (died 686), and thus is believed to date to the second half of the 7th century. Law of Hlothhere and Eadric has more focus on legal procedure and has no religious content
  • The Law of Wihtred is an early 8th-century code, written in language more modernised than the earlier codes and focuses on the rights of the Church (following the introduction of Christianity to Saxon England).

Provision 6 in the Law of Law of Hlothhere and Eadric is important to the understanding of the Anglo-Saxon arbitration process. A person, once accused, must take an oath promising to abide by the decision of a judge or accept a fine of 12 shillings. The accuser and accused must try to seek out an arbitrator acceptable to both. Once the judgment is delivered, the one ruled against must make good to the other, or swear on oath that he is innocent.  If the accused refuses to co-operate, he is liable to a fine of 100 shillings – a freeman’s wergild – and forbidden to swear his innocence in future.

This Law is also important for showing that the Kentish kingdom had control of London in the late 7th century. Provision 11 rules that Kentish men buying property in London must do so in public in the presence of two or three freemen of good standing or else before the king’s wicgerefan, port-reeve. A predecessor of these kings, Eadbald son of Æthelberht (died 640), had issued a coin in London earlier in the 7th century.

The Saxon approach to law was focused on restoring the rights of an injured party through arbitration, based on the consent of the people (not Royal Decree); these same principles of fairness and justice re-surfaced in the Magna Carta some 100 years later in 1215 when the Barons reclaimed the rights of the people to a fair trial and limited the arbitrary discretion of the Crown.  Magna Carta is based on the laws recorded in the  Textus Roffensis making the Textus Roffensis a more significant  if less well known document.

From a modern perspective, apart from the ability to ‘swear an oath of innocence’ the concept of Arbitration detailed in the Law of Hlothhere and Eadric is remarkably similar to modern Arbitration provisions. It is a pity that such an effective dispute resolution process is little used and frequently resembles a court process rather than a practical dispute solving system.

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Wishing our readers a happy and successful 2013

Posted on December 31, 2012 by | Leave a comment

The 2012 annual report for this blog prepared by WordPress.com shows a good level of interest, thanks to you with 42,000 views.

We are planning to make 2013 even better!

Click here to see the complete 2012 report.

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The need for Governance and Project Controls

Posted on December 19, 2012 by | Leave a comment

Brisconnections’ airport link, the Sydney Cross City Tunnel and 1000s of other projects are set up to fail through bad forecasting and estimating! Professor Bent Flyvbjerg, a leading international expert in the management of major projects, claims ‘the majority of forecasters are fools or liars’ and their forecasts misinform decision makers on projects instead of informing them.

Flyvbjerg’s new paper ‘Quality control and due diligence in project management: Getting decisions right by taking the outside view’ that is ‘in-press’ for publication in the International Journal of Project Management next year, defines the problem and proposes an ‘eight step’ solution.

The governance and control’s failures highlighted in this paper and the Saїd Business School, University of Oxford, press release (read the release) underpins the importance of the Governance and Controls Symposium on the 10th April in Canberra.

It is impossible to govern effectively if the information being provided from the controls systems is inaccurate or incorrect. But it is a governance responsibility to ensure adequate resources are invested in the organisation’s ‘controls systems’ and the organisation’s culture is attuned to requiring good data. The Symposium looks at how these two-sides-of-the-same-coin can be better understood. To be part of this important event either as a presenter, supporter or delegate, visit the symposium website.

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The Stakeholder Mutuality Matrix

Posted on December 18, 2012 by | Leave a comment

Whilst the stakeholder community for any project or program can be a very diverse group of people and organisations, there is a key sub-set that either require goods, services or other outputs from the project, or have to supply resources, services or support to the project. These ‘logistical’ relationships need careful management as they directly affect the project’s ability to achieve its defined goals.

Altruism and charitable actions are wonderful, but it is dangerous to base the success of your project on the assumption that all of your ‘logistical’ stakeholders are automatically going to be altruistic and generous. The Stakeholder Mutuality Matrix™ described in this post provides a pragmatic framework to help craft communications and build relationships with the stakeholders that matter from a logistics management perspective, within the project’s overall stakeholder management framework.

Understanding your Stakeholder Community

Project communication takes time and effort, both of which are in limited supply. Therefore, most of your communication effort needs to be focused on stakeholders that are important to the success of your project. This requires answering two key questions about each stakeholder:
1. Who are the most important stakeholders at this point in time?
2. Why are they important?

Understanding who is important is fairly straightforward, based on an assessment of the stakeholder’s power and involvement in the project. The Stakeholder Circle® uses a combination of power, proximity and urgency to define the most impotent stakeholders. The amount of power held by a stakeholder and their degree of involvement with the work of the project (proximity) are fairly static. Urgency, defined as a combination of the value of the stakeholders ‘stake’ in the project and the degree of effort they are likely to use to protect that ‘stake’ changes significantly and can be influenced by the effectiveness of the project’s communications and the strength of the relationships between the project team and the stakeholder. (See more on prioritising stakeholders).

Whist this process is highly effective at defining who the most important stakeholders are ‘at this point in time’, from a logistics perspective there is a second important group that also needs attention. Care needs to be taken to ensure that lower priority stakeholders who have to provide the support and resources needed for the project’s work are not overlooked in the communication framework. Effective ‘preventative’ communication can keep this group of logistically important stakeholders happy and low on the priority listing, whereas failing to communicate effectively can lead to problems and the person rapidly moving up the prioritisation listing.

Using the Stakeholder Mutuality Matrix

Once you know who is important either from a logistical or prioritisation perspective, you also need to understand why each of these stakeholders is important to define the type of relationship you need to develop and plan your communication accordingly.

The Stakeholder Mutuality Matrix™ provides a useful framework to help in this part of your communication planning. The matrix has two primary dimensions:

  • Each stakeholder will either need something from the project to further their interests or alternatively need nothing from the project.
  • Similarly the project either needs the active support of the important stakeholders, usually in the form of assistance or resources; or alternatively requires nothing from the stakeholder.

The result is four quadrants that provide a framework for communication and within the framework each stakeholder will also be either supportive or negative towards the project (for more on supportiveness see the SHC Engagement Matrix).

All high priority stakeholders need to be considered plus any low priority stakeholders that have to supply goods, services or support to the project.

  • Project needs nothing / stakeholder needs nothing: Important stakeholders in this quadrant are almost invariably ‘protestors’ or ‘objectors’ attempting to block or change the project. Occasionally very powerful and interested stakeholders have no requirements of the project.
    • Approach for positive stakeholders: Keep informed and engaged.
    • Approach for negative stakeholders: There are two communication options:
      – You may be able to defuse the ‘protests’ by providing better information, but this only works if the protest is based on false assumptions.
      – The alternative is to choose not to communicate with the stakeholder beyond some necessary minimum.
      – The only other alternative is to change the project to remove the cause of objection but this is rarely within the authority of the project team.
  • Project needs nothing / stakeholder needs something: These stakeholders are the easiest to manage from a logistical perspective; providing their requirements are part of the projects deliverables. If their requirements are outside of the project’s scope the stakeholder needs to initiate a change request.
    • Approach for positive stakeholders: All that is needed is regular reassurance that their needs will be fulfilled.
    • Approach for negative stakeholders: Provide information to clearly demonstrate your deliverables to them will be beneficial and are aligned with their core interests. These stakeholders are typically an organisational change management challenge.
  • Project needs something / stakeholder needs something: This group needs active management. Project communication needs to clearly link the provision of the required support or resources by the stakeholder to the project being able to fulfil the stakeholder’s requirements. Time needs to be spent developing robust relationships to facilitate an effective partnership that supports both parties interest.
    • Approach for positive stakeholders: A strong relationship is important to ensure a good understanding of both parties’ requirements. Including clearly defined information on what you need from them and when it’s required, linked to reassurance that their needs will be fulfilled.
    • Approach for negative stakeholders: Significant effort is required to change the dynamic of the relationship. You need their support and they need to understand that this is in their best interest if their needs are going to be fulfilled.
    • Approach for low priority stakeholders: All that is usually needed is clearly defined information on what you need from them and when it’s required, linked to reassurance that their needs will be fulfilled.
  • Project needs something / stakeholder needs nothing: This group are your major risk; it typically consists of regulatory authorities and others who have to inspect or approve the project’s work as part of their normal business. Care is needed to build a proper ‘professional’ relationship that respects the integrity of the stakeholder’s position whilst at the same time ensuring your communications are received and acted upon.
    • Approach for positive stakeholders: A good relationship is helpful; however, the key requirement is clearly defined information on what you need from them, when it’s required and why their input is important to the project.
    • Approach for negative stakeholders: Significant effort is required to change the dynamic of the relationship. They are important to you, but you are not important to them and have very little to ‘trade’. To change their attitude, you need to understand the source of the negativity and use any available option to build rapport either directly or through other supportive managers, or by appealing to some greater good.
    • Approach for low priority stakeholders: Ensure clearly defined information on what you need from them, when it’s required and why their input is important to the project is provided in adequate time to allow the stakeholder to do its work.

Once you understand the mutuality matrix, the way you communicate with each of the important stakeholders can be adjusted to ensure both parties in the communication achieve a satisfactory outcome.

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Henry Gantt – Debunking the myths

Posted on December 14, 2012 by | 2 comments

It may come as a big surprise to many, but Henry L. Gantt did not invent bar charts despite many people miss labelling them ‘Gantt Charts’ and he had nothing to do with developing project management!

This definitive paper highlights the origins of bar charts in Scotland in the 18th century and looks at Gantt’s real work in manufacturing – when you have finished reading it, I hope you will agree the following myths should be ‘busted’ once and for all:

Misconception #1 Henry Gantt developed ‘Bar Charts’ – Fact, bar charts were developed 100 years before Gantt, his charts were sophisticated production control tools, not simple representations of activities over time.

Misconception #2 Henry Gantt contributed to the development of ‘project management’ – Fact, Gantt’s work was in machine shops and factories focused on batch production and factory throughput. Many of his ideas can be adapted to modern project management but Gantt sought to eliminate ‘one-off’ jobs that could not be batched and managed efficiently.

Read the full paper in the December edition of PM World Journal at: http://pmworldjournal.net/?article=henry-l-gantt-1861-1919-debunking-the-myths-a-retrospective-view-of-his-work

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Stakeholders and Risk

Posted on December 12, 2012 by | Leave a comment

Probably the biggest single challenge in stakeholder communication is dealing with risk – I have touched on this subject a few times recently because it is so important at all levels of communication.

Projects are by definition uncertain – you are trying to predict a future outcome and as the failure of economic forecasts and doomsday prophets routinely demonstrate (and bookmakers have always known), making predictions is easy; getting the prediction correct is very difficult.

Most future outcomes will become a definite fact; only one horse wins a race, the activity will only take one precise duration to complete. What is uncertain is what we know about the ‘winner’ or the duration in advance of the event. The future once it happens will be a precise set of historical facts, until that point there is always a degree of uncertainty, and this is where the communication challenge starts to get interesting……

The major anomaly is the way people deal with uncertainty. As Douglas Hubbard points out in his book the Failure of Risk Management: “He saw no fundamental irony in his position: Because he believed he did not have enough data to estimate a range, he had to estimate a point”. If someone asks you what a meal costs in your favourite restaurant, do you answer precisely $83.56 or do you say something like “usually between $70 and $100 depending on what you select”? An alternative answer would be ‘around $85’ but this is less useful than the range answer because your friend still needs to understand how much cash to take for the meal and this requires an appreciation of the range of uncertainties.

In social conversations most people are happy to provide useful information with range estimates and uncertainty included to make the conversation helpful to the person needing to plan their actions. In business the tendency is to expect the precisely wrong single value. Your estimate of $83.56 has a 1 in 3000 chance of actually occurring (assuming a uniform distribution of outcomes in a $30 range). The problem of precisely wrong data is discussed in ‘Is what you heard what I meant?’.

The next problem is in understanding how much you can reasonably expect to know about the future.

  • Some future outcomes such as the roll of a ‘true dice’ have a defined range (1 to 6) but previous rolls have absolutely no influence on subsequent rolls, any number can occur on any roll.
  • Some future outcomes can be understood better if you invest in appropriate research, the uncertainty cannot be removed, but the ‘range’ can be refined.

This ‘know-ability’ interacts with the type of uncertainty. Some future events (risks) simply will or won’t happen (eg, when you drop your china coffee mug onto the floor it will either break or not break – if it’s broken you bin the rubbish, if it’s not broken you wash the mug and in both situations you clean up the mess). Other uncertainties have a range of potential outcomes and the range may be capable of being influenced if you take appropriate measures.

The interaction of these two factors is demonstrated in the chart below, although it is important to recognise there are not absolute values most uncertainties tend towards one option or the other but apart from artificial events such as the roll of a dice, most natural uncertainties occur within the overall continuum.

Putting the two together, to communicate risk effectively to stakeholders (typically clients or senior managers) your first challenge is to allow uncertainty into the discussion – this may require a significant effort if your manager wants the illusion of certainty so he/she can pretend the future is completely controllable and defined. This type of self-delusion is dangerous and it’s you who will be blamed when the illusion unravels so its worth making the effort to open up the discussion around uncertainty.

Then the second challenge is to recognise the type of uncertainty you are dealing with based on the matrix above and focus your efforts to reduce uncertainty on the factors where you can learn more and can have a beneficial effect on future outcomes. The options for managing the four quadrants above are quite different:

  • Aleatoric Incidents have to be avoided (ie, don’t drop the mug!)
  • Epistemic Incidents need allowances in your planning – you cannot control the weather but you can make appropriate allowances – determining what’s appropriate needs research.
  • Aleatoric Variables are best avoided but the cost of avoidance needs to be balanced against the cost of the event, the range of outcomes and your ability to vary the severity. You can avoid a car accident by not driving; most people accept the risk and buy insurance.
  • Epistemic Variables are usually the best options for understanding and improvement. Tools such as Monte Carlo analysis can help focus your efforts on the items within the overall project where you can get the best returns on your investments in improvement.

Based on this framework your communication with management can be used to help focus your efforts to reduce uncertainty within the project appropriately. You do not need to waste time studying the breakability of mugs when dropped; you need to focus on avoiding the accident in the first place. Conversely, understanding the interaction of variability and criticality on schedule activities to proactively managing those with the highest risk is likely to be valuable.

Now all you have to do is convince your senior stakeholders that this is a good idea; always assuming you have any after the 21st December!*

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*The current ‘doomsday’ prophecy is based on the Mayan Calendar ending on 21st December 2012 but there may be other reasons for this:

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Is this Start-to-Finish calculation correct?

Posted on December 10, 2012 by | 18 comments

I have recently been approached to help with an answer to the following PMP or PMI-SP type of question:

Activity A has a duration of 5, Activity B has a duration of 10, they are connected with a SF link from A to B (no lag). What is the total float for Activity A?

The basic construct of any link is that lags (or leads) create overlap. If the link was a FS link from B to A, B would finish at the end of time period ‘10’ A would start at the beginning of ‘11’. Therefore changing to a SF link, the start of A on ‘11’ is allowed because B finishes at the end of ‘10’. This makes sense, if permanent power is connected ready for use on Thursday morning; you can finish with the temporary generators on Wednesday night (unless you choose to specify an overlap, ie impose a lag).

However, the function of a link is to control the performance of the successor (not the predecessor). This raises a number of logical possibilities.

Option 1: Activity A has no predecessors, therefore it should start at ‘1’ and no successors therefore it should finish at ‘5’ and this applies to both the forward pass and the back pass meaning the Total Float is 0.

Option 2: Activity A has no predecessors, therefore it should start at ‘1’ and no successors, but the Late Finish is derived from the latest finish of the schedule. Therefor the Early Dates are 1 and 5 and the Late Dates are 10 and 6 giving a Total Float of 5.

Option 3: The SF link operates in the reverse direction and therefore A follows B and the ES and LS of A is ‘11’ therefore Total Float is 0

Option 4: The calculation option shown above where the forward pass and back pass are calculated using different methods.

The way I believe SF link calculations work correctly is set out on page 11 of our paper ‘Basic CPM Calculations’ downloadable from: http://www.mosaicprojects.com.au/PDF/Schedule_Calculations.pdf Based on this, my view is the link operates from A to B therefore Option 1 applies in the absence of any instruction to allow the schedule to ‘float to the longest path’. The consequence of this would be for B to have a negative float of 10 days.

However, I have a nasty suspicion though the question setter is looking for Option 4 as the answer. What do you think the correct calculation should be and importantly why?

_____________________________________

Dec. 11th: Thanks for the discussion below and comments via email.

Based on the problem as presented and a careful review of the comments, I believe the correct answer is:

If the network was properly constructed with a finish milestone and both activities linked to the milestone, the link would still be redundant, but the Float on A would be 5 as per Paul Giammalvo’s example below (the same result would occur if the scheduling option was set to float all ‘ends’ to the latest EF (float-to-longest-path) .

Note: Paul uses a different positioning convention for Early and Late dates.

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Posted in Scheduling

Fairfax Media problems, are they rooted in customer service?

Posted on December 1, 2012 by | Leave a comment

Fairfax Media Limited’s dismal share price seems to be matched by its dismal customer service! Media outlets live on subscriptions; regular subscribers are the bedrock of circulation numbers that in turn feed into advertising rates and revenues.

Last night Melbourne suffered major storms and there were production delays in completing the Saturday 1st December edition of The Age newspaper – with late delivery to the local agents and supposedly late delivery to customers.

You cannot help bad weather, however, this is no excuse for dismal customer service. The failure of Fairfax Media’s to offer effective customer service runs at several levels:

  1. They could not be bothered to put an easily accesses notice on there web page – the only way to find out what’s gone wrong is through time consuming telephone calls. Presumable Fairfax Media puts trying to keep their production problems a secret ahead of customer service – a failure on 2 counts!
  2. The local newsagent Dundas Place Newsagency Pty Ltd simply refused to answer its telephone for the whole for Saturday morning!
  3. After a 15 minute wait to speak to the Age subscriber call centre at 9:00 I was advised about the late delivery to the newsagent and that the papers were in the process of being delivered now. Possibly true of some locations – not to us.
  4. After a 5 minute wait at 11:30 speak to the Age subscriber call centre again (the local news agency was still refusing to answer its ‘phone). I was told it was too late to organise a re-delivery; this had to be notified to the agency by 7:30am.
  5. All that was offered in compensation was a credit for the discounted delivery of the Age – if we wanted to see today’s paper we have to walk to another (much closer) news agency and pay the full price. This is despite the fact we have a long-term contract with Fairfax Media for daily deliveries of the paper.
  6. From previous failings of the delivery system we have learned the only way to get a credit for Fairfax Media failing to honour its contractual obligations is to spend valuable time on the telephone and request the credit – even where there has been no delivery to anyone or the news agent is aware of their failure to deliver.

Production problems are occasionally unavoidable in any industry, particularly time pressured processes such as newspaper production. What has prompted this post is the chronic failure of Fairfax Media both at the contractual level and at the customer service level.

  • Good customer service requires an organisation to go out of its way to minimise inconvenience to its clients caused by its failure and to volunteer compensation – done properly it builds customer loyalty. When done as badly as the Age simply it simply drives customers away; they have demonstrated they have no real interest in their customers so why should I bother to remain a subscriber? Multiply this by several thousand people and the damage to Fairfax Media’s value becomes obvious.
  • From a contractual perspective, the law requires a breach to be remedied and the non-default party to be placed in the same position as it would have been if the breach had not occurred. The remedy offered does not recompense the actual costs involved in telephone calls, time wasted or the actual cost of buying the replacement paper at the news stand prices.

I have lodged a formal complaint with the Age call centre which of course cannot be dealt with until ‘management’ wake up on Monday morning, but may not be dealt with for 48 hours……. So we will see what happens. It is a real pity the Age’s excellent journalism is not backed up by effective management and good customer service.

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