Strategic leadership

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Are you willing to follow -- or be led by -- a  leader who can't do the job you're doing?

What I'm speaking of is the distinction between the strategic leader and the operational leader

• The strategic leader is the visionary -- usually -- but most importantly is the leader that connects all the dots in the long game; allocates resources strategically; causes integration to occur for the benefit of the far future. 
• The operational leader leads by example -- can step in and do your job if necessary; more tactical and willing to make course corrections in the short term. Definitely in touch with the details

A bit tricky, this leadership thing: if you don't think your leader can do your job, do you think they are an "empty suit"? Many pin that label on the strategic leader.

It's not always clear cut:

The strategic person often has to make the tactical call at the cross roads to go this way or that way; or relieve and replace subordinates that are not performing. And, the operational person is going to engage strategic planning and engage with their Board, regardless of their main focus and agenda.

Optimistic v pessimistic

 From the concepts embedded in the "cone of uncertainty", we generally think of strategic people as optimistic in their outlook for the simple reason that the long reach gives time to make things right.

The flip side: the press of immediate actions -- and problems -- makes the operational leader more pessimistic

Situational leadership style

From the concepts of "situational leadership", we generally think of the strategic leader as the delegation person: give the tacticians all the rope they need and stand back. If they fail, replace and repeat.

Planning as a methodology

And, the strategic leader is going to put more stock in long range planning. In fact, to the strategist, the planning itself is more important than the plan. As soon as you've got a plan, you're in tactical mode. Let others do the execution.

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Not-measurable predictions and forecasts

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Not-measurable predictions and forecasts: ever made one? Actually, who hasn't?

There's personal safety in not being measurable. Indeed, you can fill space and take up time with blather that is not accountable: if what you forecast and predict are not measurable, but yet fill a space where a forecast is needed, what's the risk? Nobody can hold you accountable for it!

Actually, there is a risk, not usually found on the project risk register: Absence of accountability often begets exaggeration, if not also overconfidence and extremism, all of which may have measurable consequences.

And, so we read that others have gotten onto this idea also:

There is a familiar psychological mechanism at work here. [Studies] show that if people expect that others will evaluate the accuracy of their judgments — that is, if people feel they will be held accountable for their views — then they tend to avoid cognitive pitfalls such as overconfidence and the failure to update beliefs in response to new evidence.

[Researchers] have demonstrated that accountability has this effect because it encourages people to pre-emptively think of ways in which they might be wrong — before others do it for them.

But when people make non-falsifiable predictions, they feel less accountable. After all, if a prediction can never be disproved, then it poses no reputational risk. That lack of accountability, in turn, encourages overconfidence and even more extreme predictions.

And, so the antidote is?

• You can measure anything? Perhaps in theory, not really in practice, but nonetheless the idea sells books and lectures. However, it's the place to start: How would I know I'm DONE in project parlance?
• Don't accept blather as a substitute for critical thinking. Of course, this requires you have a "blather filter" you can engage, and then the personality to challenge the blatherer
• Always ask: can I measure the outcome; recognize success? If not: back to the drawing board for a different formulation.

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Choose your box

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Do you buy this idea from Mark Chussil?

A box is a frame, a paradigm, a habit, a perspective, a silo, a self-imposed set of limits; a box is context and interpretation.

We cannot think outside boxes. We can, though, choose our boxes.
We can even switch from one box to another to another.

Boxes get dangerous when they get obvious, like oft-told stories that harden into cultural truth. Letting a box rust shut is a blunder not of intention but of inattention.

Boxes are invisible until we look for them.

In other words: driving yourself to think "outside the box" is a box onto itself. The "outside box" is a box --- gasp!

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Maturity model

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Yuk! No one wants to read about a maturity model. Isn't that a tool from 30 years ago?
Nonetheless, over at herdingcats, there is an image of a model that captured my attention for a couple of reasons

• The image itself is an attractive presentation
• The substance is clear enough that most can see some advantage of every step

This model, like models, is a simple and abstracted view of real life so that we focus on the substantive points. That is, no one works in an organization that is exclusively on one level or another. The points being:

• In some things, we're level 1 or 2, making it up as circumstances emerge -- Innovation may occur here.
• In other things, we've advanced to level 4 or 5 because we know exactly how to do it, and we're committed to making it even better --- Productivity (and profitability) may occur here.

And, so having read this far:

• Is there something useful here, or
• What's the utility?
• What's the action item for a project office?

Answer:

• Maturity models are checklists, on the one hand -- stuff we should be doing. Are we doing them?
• Maturity models can serve as strategic objectives (to climb the steps), giving a glimpse of a differentiated future. Do we have a plan to get to one step or another? After all, who wouldn't be striving for the fifth step, always focusing on improvement?

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Decline -- Maturity -- Growth

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A few thoughts about decline, maturity, and growth insofar as they affect the choice of projects, given scarcity (and there's always scarcity):

• The real test between maturity and decline is whether or not there is new investment going into the business.
  
  In the decline stage, the emphasis is on cost control, efficiency, and getting the most out of existing product with existing customers; there's little or no investment beyond required maintenance. Over time, product will obsolesce and customers will move on.
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• If there's investment going into finding new customers with existing product, that's probably a mature organization surviving.
• Working back to compare maturity with growth, the difference here is that with growth investment is going into both customers and product, keeping both fresh and competitive.
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• Also bear this in mind: These ideas are not limited to private sector businesses; government agencies and NGO's have all these same attributes.

And, here's a challenge question:
When is an expenditure a cost and when is it an investment? Sponsor attitudes are usually quite different depending on the view point.

My answer: It's an investment when it goes toward making the future different from the present. That is: it's aimed at strategic differentiation -- to wit: start-up and growth. Else, it's a cost required to keep things moving along as in the present for maturity and decline.

People, too
And, you can extend the argument to people: the CFO carries people on the liability side of the balance sheet -- creditors (they provide time and talent) to whom we owe benefits, salary, etc. in return.

But, what if you're out to hire the one best person to do a task and make a strategic difference toward growth? Investment (asset) or cost (liability).  If an investment, hopefully you've got their scorecard set up to reflect the ROI demand.

  

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Four rules for business success

I've recently learned that Sam Palmisano, the retiring--and successful--C chief of IBM, has four rules for business success

1. “Why would someone spend their money with you — so what is unique about you?”
2. “Why would somebody work for you?”
3. “Why would society allow you to operate in their defined geography — their country?”
4. “And why would somebody invest their money with you?”

That's swell for IBM, but his successor--a lady C Chief in waiting--has been named, so most of those reading this blog are unlikely to lead IBM for at least the next 10 years. Thus, I move to the project management domain.

Caution: changing domains is often problematic. Some things just don't port from one to another. But try this for fit:

Why spend money with you is the grist of project PROPOSAL THEMES. If you ever written a proposal for competitive work, the first question to be asked is "what's the win theme?" The win theme, like its counter part, the project theme, is for the seller the way to win business; and is for the buyer the reason to buy from the seller. It's a bilateral theme to be viewed from both parties.


Why would somebody work for you is at the heart of TEAM RECRUITING. In the agile space, teams are recruited, not assigned. But if you've not got the elevator speech on why work for our team, you may have the right to recruit, but what if nobody wants to work with you? SOL!

Why would society allow you to operate is an obvious THREAT for the risk register. If you can't handle the politics, your project may be DOA and over before it begins!

And why would somebody invest their money with you is a question is all about BUDGET SCARCITY. Stakeholders have choices. It's a rare company that has more to invest than there are quality projects to fund. So, we're right back to competition, only this time we're competing for resources. Can you speak to NPV, IRR, and EVA? If you can't handle this alphabet challenge, you may find your project high and dry waiting for another opportunity.

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Project balance sheet

If you follow this blog you've read several references to the project balance sheet. So, is this about accounting? Yes, and no: Yes, it's about a double entry tool to keep track of "mine" and "yours", but no, it's not the accountant's tool used in your father's accounting office.

Take a look at this figure:

What have we got here?

First, 'mine' and 'yours'.

On the left side of the balance sheet is the sponsor's investment in the project. Investment need not be all monetized. It's the 'your's side of the balance sheet, somewhat akin to the right side of the financial balance sheet (money owed to creditors and money invested by owners). 'Yours' simply means it's resources owned by others and provided to the project.

On the right side is the 'mine' side of the project balance sheet, akin to the left side of the financial accounting sheet (assets owned by the business). The right side is the project side, and the right side shows the estimates and evaluations of the project manager.

And, take note: the left side, the sponsor's side, is the fact-free zone: it's a top down allocation of resources to the vision. It is the ultimate utility expression of the sponsors: what's valuable, and how valuable, even if not entirely objective. And on the right side, it's all about facts (benchmarks) and estimates (benchmarks applied to project circumstances). It's bottom up.

Of course, there's the inevitable gap where utility collides with facts and fact-based estimates. The gap is the risk between expectations and capacity-capability. And how large is the gap (risk): only as large as needed to create a balance--that is, a deal with the devil--so that the project can go forward.

 In other words, the gap (risk), shown on the project side, is only as large as it needs to be to close the gap. Usually, it's a matter of negotiation, but once the PMB is set, the risk is the PM's responsibility to manage.

In other words, the PM is the ultimate risk manager.

In a real world example, I had this situation:

• We bid a job competitively in a firm fixed price environment. 
• We offered a price that was equal to our cost; in other words, no fee (profit).  We just wanted to keep the lights on and keep barriers to competition with our customer as high as possible. 
• We won! 
• And, in  the next moment, my general manager said: "Your bonus depends on making 4% net margin".  I had my gap!  (oh yes, I made the margin and the customer was satisfied)

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Value is in the eye of the beholder

Value is in the eye of the beholder

Most projects do not stand apart from the business models of the enterprise that hosts them. The value proposition is always in the eye of the beholder -- stakeholders and customer alike -- meaning that value is bestowed by the beneficiaries. Simply put, projects fill a need not obtainable by other means and that is why the enterprise places a value on the outcomes.

Projects absorb the culture and demands and investment attitudes of the enterprises they benefit. These attributes affect not only means and methods but they affect pace and velocity. The worthiness of the endeavor is often a matter of timeliness, the time-value of benefits, a point well recognized by agile practitioners.

Most organizations pull all this together in a strategic plan. Strategic planning, as commonly practiced, sets goals and objectives and a notion of how to get there. This notion we call strategy: strategy is a linked and ordered set of activities that point unambiguously to a goal. Strategy is a plan for action set in context of culture and attitude, strengths and weaknesses, and threats and opportunities. Projects are a part of the action, an element of strategy and thereby a means to achieve goals.

A project management tip
Strategy is like a vector, possessing direction and magnitude. Strategy provides the linked actionable steps to achieve a goal

Projects with real business value are instruments of strategy
Projects without strategic alignment may provide momentary value but are lacking the sticking power of being on the road map to a beneficial goal

Projects are instruments of strategy, providing the means to execute important steps on the pathway to goals.

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