popular recently. A self-directed team is a group of well-trained workers with full responsibility for completing a well-defined segment of work. This segment of work may be the entire finished product or an intermediate part of the whole. Every member of the team shares equal responsibility for the entire segment of work. Conceptually, self-directed teams are the opposite of traditional teams that work in an assembly-line manner. In an assembly line, each worker assumes responsibility for only a narrow technical function. In self-directed teams, each worker is equally responsible for the entire segment. This, of course, requires that the team members receive extensive training in administrative, technical, and interpersonal skills to maintain a self-managing group. Self-directed teams have many more resources available to them compared with traditional teams.
Traditional teams assign a narrow function to each member. Since a large number of people contribute to the finished product, individual workers see little relationship between their efforts and the finished product. This often leads to apathy and alienation. All members in self-directed teams receive extensive cross-training, and they share in both the challenging as well as the routine activities for their segment of work.
Obtaining Senior Management Support
Obtaining the cooperation of senior management is essential. Senior management’s involvement and attitude toward projects differ from company to company and from person to person. Senior management might be very supportive of the project or may hardly care at all about it. Senior management’s attitudes may be classified as follows:
►“It is your project. You have to solve your own problems. I don’t want to be bothered until it is completed.”
►“I would be happy to work with you and resolve any problem you encounter.”
►“A Ithough I would like to help, there is nothing I can do. You will have to resolve this problem on your own.”
►“Keep me apprised of the situation and any problems you encounter. I want to be informed of everything.”
Regardless of senior management’s attitude, you should be prepared to complete the project without any help. Frequently, you will have no choice but to do the best you can with limited or available resources.
Developing a Feasible Budget
The budgeting process may be a source of confusion and frustration for many project managers. There may be a great deal of pressure to remain within the budget. A budget is simply an estimate of the sources and uses of cash and other resources. Since the budget is an estimate, it is unlikely that the final expenditures will be exactly equal to the budget.
Preparing the budget at a realistic level is important. Agreeing to an inadequate budget is unwise. While it may be convenient at the formation stage to reduce or minimize conflict, you and your project will ultimately suffer. You will be expected to explain unfavorable variances to senior management. Moreover, you will likely receive a very negative response when your project goes over budget.
The budget should always be developed by the project manager. It is unrealistic to work with an imposed budget. The project manager is generally in the best position to estimate what the project should cost and is therefore responsible for explaining any resulting variances. Accordingly, you should always insist on developing your own budget and should not settle for an inadequate budget simply to minimize conflict at the outset. Otherwise, both you and your project will suffer in the long run.
Project budgets are typically more difficult to prepare and adjust than departmental budgets. Projects typically consist of nonroutine activities. Departmental budgets are generally prepared annually and are often revised quarterly or semiannually. In contrast, project budgets are devised for the life of the project and are not related to a fiscal year. Revisions to project budgets are uncommon in the absence of a mistake in the original budget or a major change in the scope of the project. Unfavorable variances in a project are typically noticed more readily than unfavorable variances in a departmental budget. At the departmental level, variances are often accepted as being inevitable, but similar variances in a project are often frowned upon. In general, a project manager is typically held to a higher level of accountability than a department manager.
The major expense in most projects is likely to be for human resources. When estimating labor expense, consider both the labor hours and the skill levels needed to complete each phase of the project. Multiplying the hours by the labor rate at each level will give the total labor cost.
Also for each phase of the project, prepare a detailed budget listing the materials, supplies, and equipment requirements, which may vary widely. Some projects consist essentially of administrative tasks and do not require any special materials or supplies. Other projects may require considerable expenditures on property, plant, or equipment.
Fixed and variable overhead is another major category of expenses for most projects. Companies differ in how they allocate fixed overhead, but it is usually by a formula. Overhead may be allocated based on labor hours, labor cost, machine hours, square feet, etc. Variable overhead is allocated to the project like other project-specific expenses. In general, overhead is more likely to be allocated for longer-term projects. For shorter-term projects, senior management may decide not to allocate overhead expenses. It is essential to identify significant variances from budgeted amounts. Most companies require formal variance analysis at the end of the project. You should do a variance analysis at each phase of the project and take corrective action, if needed. If a phase is long, consider doing monthly variance analyses. All significant variances, whether favorable or unfavorable, should be investigated.
If actual expenses exceed budgeted expenses, investigate the cause. Budgets are closely tied to work schedules. Certain phases might be taking longer than estimated. You may have no choice but to demand more work from your team members. Also, your original assumptions and estimates might be wrong, or a significant change might have occurred in the scope of the project. You may need to request senior management to revise the project budget. It is sometimes possible to absorb unfavorable variances from one phase into the next phase. Your personal involvement in future phases of the project might also enhance productivity. You may also need to initiate budgetary controls to curb spending.
It is important to investigate all significant variances, not just the unfavorable ones. Sometimes expenses turn out to be less than budgeted. Examine why you are under budget. Is your team more productive than anticipated? Was there a significant decline in the price of materials, supplies, or equipment? Were your original estimates inaccurate? Is quality being sacrificed in any way to obtain cost savings? Do you expect to incur expenses in later phases that might wipe out any savings from the earlier stages?
Detailed Time-Schedule Preparation
Prepare a schedule for each phase of the project. You will be unable to complete your project on time without planning and controlling the time budget. Even a small delay in one phase of a project can have a significant effect on the overall completion time. Many tasks in a project are interdependent. A small isolated delay may not be a problem, however, when activities are interdependent, a small delay might throw off the entire schedule.
The schedule should be reasonable and realistic. Some projects are plagued by delays. If you have been unable to complete the initial phases on time, it is unlikely that you will complete the project on time. An effective project manager knows how to set up a realistic time budget and how to follow through on the budget. Time-management skills are essential characteristics of a good project manager.
When planning the initial schedule, budget a little slack. But keep in mind project deadlines are often imposed and you may have no choice but to work within the imposed guidelines.
