Question

Maximum Megahertz Project Olaf Gundersen, the CEO of Wireless Telecom Company, is in a quandary. Last year he accepted the Maximum Megahertz Project suggested by six up-andcoming young R&D corporate stars. Although Olaf did not truly understand the technical importance of the project, the creators of the project needed only $600,000, so it seemed like a good risk. Now the group is asking for $800,000 more and a six-month extension on a project that is already four months behind. However, the team feels confident they can turn things around. The project manager and project team feel that if they hang in there a little longer they will be able to overcome the roadblocks they are encountering—especially those that reduce power, increase speed, and use a new technology battery. Other managers familiar with the project hint that the power pack problem might be solved, but “the battery problem will never be solved.” Olaf believes he is locked into this project; his gut feeling tells him the project will never materialize, and he should get out. John, his human resource manager, suggested bringing in a consultant to axe the project. Olaf decided to call his friend Dawn O’Connor, the CEO of an accounting software company. He asked her, “What do you do when project costs and deadlines escalate drastically? How do you handle doubtful projects?” Her response was, “Let another project manager look at the project. Ask: ‘If you took over this project tomorrow, could you achieve the required results, given the extended time and additional money?’ If the answer is no, I call my top management team together and have them review the doubtful project in relation to other projects in our project portfolio.” Olaf feels this is good advice. Unfortunately, the Maximum Megahertz Project is not an isolated example. Over the last five years there have been three projects that were never completed. “We just seemed to pour more money into them, even though we had a pretty good idea the projects were dying. The cost of those projects was high; those resources could have been better used on other projects.” Olaf wonders, “Do we ever learn from our mistakes? How can we develop a process that catches errant projects early? More importantly, how do we ease a project manager and team off an errant project without embarrassment?” Olaf certainly does not want to lose the six bright stars on the Maximum Megahertz Project. Olaf is contemplating how his growing telecommunications company should deal with the problem of identifying projects that should be terminated early, how to allow good managers to make mistakes without public embarrassment, and how they all can learn from their mistakes. Give Olaf a plan of action for the future that attacks the problem. Be specific and provide examples that relate to Wireless Telecom Company. Read the case study above “Maximum Megahertz Project” (Page 549 from: Larson, E.W. & Gray, C.F. (2010). Project Management:

a) What do you think Olaf Gundersen, the CEO of Wireless Telecom Company should do? Use what you know from the case and the course to build the arguments? (The answer will not be graded based on right or wrong but how the arguments are developed.)

b) What are some potential conflicts that could result from the steps in recommended in a? How could you apply change management or conflict avoidance/resolution techniques to avoid or resolve these?

c) Based on what you have learned in this class, what could have been done so that the project problems would have been avoided? (Of course, you do not have complete information but use what is here and what you have learned is best practice in managing projects.) (30 points)

d) Costs and deadlines of the projects escalated in the Maximum Megahertz project. Why are accurate estimates critical to project management? What would you advise Olaf about his problems with estimate? How to develop a process that would result in more realistic estimates?

e) How should Olaf improve project management in his organization?

Answer 1

1. I would recommend Mr. Guderson to review the project (to check whether there is a substantial improvement being made or are they close to adding some value as they claim to be) and check whether the promise which they are currently making is achievable and feasible (Ask for a detailed plan, justifying the investment being made along with the timelines and milestones on a frequent intervals).

Since most of the managers believe that the power pack problem can definitely be resolved, he can work on the cost benefit analysis for fixing that problem (Considering the worst outcome of having only that problem being fixed).

Along with that he should also request for the reasons for the projects not being completed in time needs to be evaluated. Having a third party to monitor the project to keep up with deadlines needs to maintained and frequent reviews and intermittent reviews needs to be conducted, to have a close eye on the project.

2. Considering the fact that the above stream which we are discussing is R&D, there will conflict in frequent reviews on the progress being made. There might be conflicts in providing exact plan along with milestones as we can see that the project management process in place is very weak.

Mr. Guderson can use a third party to address the conflicts which might arise. Third party is recommended as it is also mentioned in the case that, he does not want to have bad blood with his star employees. Third party person will recommend and also provide suggestions for minimizing the deviation and the conflict can be suppressed by effectively communicating the reasons for the same.

I would go for a 3-strike rule.

Firstly, clearly communicating the reasons for the new process along with the benefits to the project

Secondly, communicating how it will ease the project activities and in turn will help the organization

Third, imposing the change on them

3. Basis the case, following are the things that I would have done differently:

a. It was very clear from the first sentence that Mr. Guderson did not have clear knowledge of the project. I would have called a SME (Subject Matter Expert) for our discussion and had a clear understanding and then evaluated the proposal given.

b. It is mentioned that he took a gamble considering the cost is less. If I feel the cost quoted is very less, I want to evaluate the plan. Usually there will be a error in the planning, mainly because project management aspects are not clearly considered. I would also consider evaluating the similar projects executed and see whether the cost quoted is same or different from the one in hand. This will help in understanding the dynamics.

c. Since already company have wasted their money in similar projects, I would have taken a proactive approach to evaluate the reasons for failure and rectifying it,and then getting into work, rather than simply initiating the project just because the cost quoted is less.

d. Usually R&D project will have one manager, I would suggest a Technical manager, managing technical stuffs and a project manager, to keep track on project management related activities.

e. I would provide clear training to the resources to understand the importance of project management frameworks, rather than pushing them at the last instance.

4. Technically speaking Cost variance and Schedule variance are the two most important metrics when it comes to Project Management.

Considering the fact the most of the organizations penultimate goal is to earn profits, no one will like to spend more cost that what is required. And also considering the fact that the business is changing very frequently and competitors are also trying to resolve the problems in hand, moving into market quickly is a necessity for having competitive advantage. Along with that schedule variance is directly proportional cost incurred. Hence these 2 metrics are very critical in Project Management.

Having not evaluated the over all reason, I believe the issue might be because of the planning. Seems like the cost was extremely low for the project of that magnitude. Or there might be issue of clear understanding of underlying costs and time of the project. I would advice Olaf to have clear understanding of the project and also review the project plan in a detailed fashion, before giving nod.

Mr. Olaf can use similar previously executed successful projects as an example to estimate the Project management metrics.

5. He can improve Project Management in following ways:

a. Use a Project Management experts to provide trainings to the employees, showcasing examples and its benefits

b. Have clearly stated metrics to monitor the activities, on whether the same being followed or not

c. Have a audit team, to conduct audits as a individual body to sustain the implementation

d. Make it mandatory to follow the framework

e. Reward the people who performs good with the metrics.