Transcript No Slide Title

Project Team Contract:
Link Management, Sponsor, and Core Team
into a “Superteam”
Mark F. Hynnek, PMP
Project Management Specialist,
3Company
[email protected]
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Environment
• Organizational environment
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Innovation
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The 3Environment
Customers
R&D
Divisions
Functional
Communities
Marketing & Sales
Conferences
Councils
Forums
SIG’s
Manufacturing
Info. Tech.
Technology Platforms
Values & Principles, Climate for Innovation,
Financial Goals
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Environment
• Organizational environment
• Project Management Methodology
•Charter
•Sponsorship
•Intact team planning
•Contact
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Environment
• Organizational environment
• Project Management Methodology
• NPI
•Stage-gate / high concurrency matrix
•Five phase / thirteen processes
•Management decision points
•Go until told to stop
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Concurrent Process / Time Relationship
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Management Support for Project
Feasibility and Optimization
of Opportunity
Planning and
Concurrent
Product &
Information
Process
Convergence
Development
Development
and
Preparation
for
Global Launch
Achieving
Global
Business
Goals
Supply
Chain
Cross - Functional Development Team
Determine customer expectations, ongoing feedback and verification
Process of product marketing
Technology for product performance and technical performance
Design for manufacturability and manufacturing
Business profitability and growth
Supplier selection,cooperation and strategic alliance
Proprietary technology protection for products, process, and trade secret matters
Assurance of product and service performance consistency and reliability
Achieve health, safety and environmental life cycle management
Customer order fulfillment and demand management
Team formation and maintenance
Process equipment and facilities
Packaging and labeling
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Environment
• Organizational environment
• Project Management Methodology
• NPI
• Teams
•Full time leader
•Cross-functional
•Dedicated resource
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“Superteam” Composition
• The Usual Players
•Management
•Sponsor
•Functional Manager
•Team Leader
•Core Team
• 8-12 Members
• Cross-Functional
•Cross Corporate
•Specialized Resources
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“Superteam” Composition
• The Usual Players
• The Contract
•Documented
•Binding
•Defining
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Conceptual Team Structure
Division
Management
Mtl.
Plant
Cntl.
Pilot
ES&T
Plant
Mfg..
Tech.
Controller
TL
Vendor Purch.
Support team
OUS
Mktg.
Mktg.
Comm.
3M 2002
TL
Core Lab
Mktg. Team Quality
Tech Patent
Serv. Liaison
Sector
TL
Lab
Prod.
Tech.
Center
Resp.
OUS
Devel. Lab
Support team
Six s
DFSS
TL
TL
Hardware
Software
Pkg. Eng.
TL
Sales
Support team
Support team
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Sponsor
Mfg.
Eng..
Mktg.
Res.
TL = Team Leader
Field Svc.
Softgoods
Design
Engr.
Vendor
Control
Engr.
Secondary
support team
ES&T Facilities
Engr.
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Roles
• General
Inside - Outside
Comfort Zone
Stretch
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Roles
• General
• Management
Strategic Direction Opportunity
Selection Portfolio Management
Personnel selection
Team Support and Empowerment
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Roles
• General
• Management
• Sponsor
Critical / Spanning
Highly Placed
Culture Knowledgeable
Trusted coach / Councilor
Able
to Remove Barriers
Legitimize the Project
Help Select Personnel
Responsible for Business Success
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Roles
• General
• Management
• Sponsor
• Functional Manager
Resource Provider - level, skill, Maintenance
Functional Integrity
Budgeting
Support Team Leader
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Roles
• General
• Management
• Sponsor
• Functional Manager
• Project Leader
Trial by Fire
Safety Nets
Integrative - Team / Sponsor
Clarify Objectives and Priorities
Lead Meetings
Report to Management
Team
Maintenance
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Roles
• General
• Management
• Sponsor
• Functional Manager
• Project Leader
• Core Team Member
Lead Sub-teams
Lend Technical Expertise
Integration - Team / Function
Define and Complete the Work
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Program Management
Start Up Requirements
Strategy
Vision
Mission
Goal
Objectives
Deliverables
Constraints
Assumptions
Concerns
Benefits
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Project Team Contract
An agreement between and signed by
management, sponsor and the project
team. It contains all the team deliverables
and metrics. Also contained are the team
requirements (management deliverables)
necessary to achieve their deliverables or
metrics. the team keeps going as long as
deliverables / metrics are within
acceptable range and stop only if out of
bounds.
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Contract Development
• Charter
Completed by sponsor and management
What not How
Targets - time, cost, performance
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Project Charter Template
Prepared By: Date:
Executive Sponsor
(name and signature)
User Project Leader
(name and signature)
IT Project Leader
(name and signature)
Section 1 - Project Background Information
Project Name/Number:
name of your project, project accounting number
Clients:
Name(s) of your main client/requester
Project Problem or Opportunity:
State the problem or Opportunity that requires the establishment of the project.
Project Scope:
What the project will and will not include
Project Objectives:
State the objective(s) of the project in clear, measurable terms, using action verbs and be as specific as possible
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Project Timing:
State your best guess as to when the project will be completed.
Systems /Areas Involved:
State any systems interfaces or areas that will need to be considered or developed during the project.
Project Size:
Give a high-level estimate of the size of the project in terms of human resources and duration.
Section 2 - Authority of the Project Leaders & Team Roles and Responsibilities
User Project Leader:
State your perception of the User Project Leader’s authority on this Project as far as Staff Responsibility, money
authorization and management, and direct or indirect accountabilities.
IT Project Leader:
State your perception of the IT Project Leader’s authority on this Project as far as Staff Responsibility, money
authorization and management, and direct or indirect accountabilities.
Project Sponsor:
State your perception of the Project Sponsor’s authority on this Project as far as Staff Responsibility, money
authorization and management, and direct or indirect accountabilities.
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Project Teams:
State any knowledge you have about the composition of the team(s) for this project, including roles to be played,
names if known, and job position if known. Also briefly describe what the team is accountable for and to whom.
Section 3 - How the Product will be defined or selected, modified and implemented
Requirements Gathering:
State the techniques that will be used to define User and Technical Requirements.
Design, Development and Implementation Approaches:
State the techniques that will be used to design, develop and implement the business and technical modification.
Deliverables and Milestones:
State which deliverable components and milestones you intend to use to achieve the project objectives.
Product Quality Assurance:
State the quality assurance reviews that will be performed to ensure the accuracy, completeness and acceptability
of the Product that will be produced.
Section 4 - How the Project will be structured and scheduled
Methodology / Work Breakdown Structure:
Describe the methodology that will be used and the approach (WBS) you will take on this project to establish the
pieces of work (tasks and activities) that will need to be done to complete the project.
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Project Quality Assurance:
State the quality assurance reviews that will be performed to ensure that the Process that is being used to produce
the product is adequate and efficient given the project size and objectives. These reviews may address the project
organization, plans and strategies.
Project Reporting:
State your expectations of how you will gather project status reports from your team members and participants. It
should contain clear timing expectations and comment on when and how often team briefings will occur.
If appropriate identify key users and areas that need to be informed about the project implementation plans and
significant accomplishments, and the communications approach and timing.
Software Support:
State what software, if any, will be used to plan, track and report on the project. Also state if the Team will be
required to interact with the software and/or require training to do so.
Project Glossary:
State whether a Project Glossary will be prepared for the project and if so, who will create it, update it, and publish
it
.Project Procedures:
State various procedures that will be in use during the course of your project. Examples are:
Change Control:
State what the Change Control policy, form(s) and procedure will be used for your project. Also state what the
outcome conditions will be for a change whether it is accepted or rejected.
Issue Resolution:
State what the Issue policy , form(s) and procedure will be used to handle project issues
Project Contingency:
State what your contingency budget or percentages are for your project. This should be stated in terms of both cost
and schedule contingencies.
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Contract Development
• Charter
• Team Planning Process
Facilitated
Intact Team
Kick-off Background
Goal unification
Benefits
Assumptions
Key Issues
Concerns
Risk Assessment
WBS
Milestones
Work tasks
Dependencies
Critical Path
Finalize
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Contract Development
• Charter
• Team Planning Process
• Contents
Key Customer Requirements
Selling Price
Market Share
Factory cost
Unit sales
Unit Availability
Process Capability
NPV / EVA
HR Requirements
Capital Expenditures
Equipment Availability
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Project/Program Name _________________________________________________________________
Date _________________
Program Contract
Team Deliverables
Management Deliverables
1. Mfg. Unit Cost
_______ to _______
2. Project Costs
- Development
- Capital Equip.
- Mkt./Sales
- Regulatory
- Other
- Other
Total Costs
_______ to _______
_______ to _______
_______ to _______
_______ to _______
_______ to _______
_______ to _______
_______ to _______
Personnel ______________________
_______________________________
_______________________________
_______________________________
Equipment ______________________
_______________________________
Funding __________ to ___________
_________________ to ___________
Facilities _______________________
_______________________________
3. Schedule
- U.S.
- Final
_______ to _______
_______ to _______
Partnership(s) (Outside Firm(s) or
3M Division(s) __________________
_______________________________
4. Unit Forecast
- U.S.
- Final
_______ to _______
_______ to _______
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Program Contract
Project/Program Name _______________________________________________________________
Date ______________
Key Dates
Phase I
Phase II
Phase III
Phase IV
Phase V
Phase VI
Planned
________
________
________
________
________
________
Revisions Misc.)
1.
2.
3.
4.
5.
6.
Approvals
1. ____________________
2. ____________________
3. ____________________
4. ____________________
5. ____________________
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Actual
________
________
________
________
________
________
Approval
________
________
________
________
________
________
Date
________
________
________
________
________
________
Approval
________
________
________
________
________
________
Sponsor: ___________________________________
Team Leader _______________________________
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Program Contract (Continued)
5. Average Selling
Price
_______ to _______
6. N.P.V.
_______ to _______
7. Product Features
8. Assumptions
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Contract Development
• Charter
• Team Planning Process
• Contents
• Format
Bar / Gauge
Color Coded
Target / Actual
In Control / Out of Bound
Dates
Revisions
Sign Off’s
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Program Contract
Team
Deliverables
Comments/Action
Performance/durability
Customer Reqmts (% met)
40
50
60
70
80
90
100
On target
Sell Price ($/yd2)
.30
.50
.70
.90
Need to resolve waste issue
Factory Cost ($/yd2)
.10
.20
.30
.40
On target
Unit Sales (MM/yr)
0
2
4
6
8
10
12
Unit Availability (WW)
1/97
7/97
10/97
1/98
Improve variability
Process Capability (Cpk)
0.5
.75
1.0
1.25
1.50
1.75
2.0
NPV ($MM)
10
Legend
Target
Actual
Need additional manufacturing
output
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In Control
Out of Bounds
Neutral
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16
18
20
22
Improvement in F.C. and
schedule required
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Program Contract
Management
Deliverables
Comments/Action
Need 2 additional lab by
Lab Personnel (each)
0
3
6
9
12
15
18
Need 1 additional market by
Market Personnel (each)
0
1
2
3
4
5
6
0
1
2
3
4
5
6
Capital Expenditures ($MM)
Negotiate additional time
Coater Availability (days)
10
12
14
16
18
20
22
Conflicting priorities
Partnership (% acceptable)
40
50
60
70
80
90
100
Move 3 people
Co-location (%)
0
Legend
Target
Actual
10
In Control
Out of Bounds
Neutral
20
30
40
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60
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Contract Development
• Charter
• Team Planning Process
• Contents
• Format
• Management Negotiation
Present
Adjust
Sign Off
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Contract Development
• Charter
• Team Planning Process
• Contents
• Format
• Management Negotiation
• Implement
MS Project
Graphics Software
Risk Plus
Network /Gantt
Proactive
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Summary
• Role Definition
•Clarified
•Differentiated
•Integrated
•Efficient
•Effective
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Summary
• Role Definition
• Accountability
•Defined
•Quantified
•Assigned
•Tracked Measured
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Summary
• Role Definition
• Accountability
• Empowerment
•Team
•Freeing
•Participatory
•Co-authorship
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Summary
• Role Definition
• Accountability
• Empowerment
•Sponsor
•Guide
•Mentor
•Coach
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Summary
• Role Definition
• Accountability
• Empowerment
•Management
•Better Information
•Better Decisions
•More Strategic
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Summary
• Role Definition
• Accountability
• Empowerment
• Commitment
•Co-authorship
•Understanding
•Growth, Stretch
•People Value Added
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Buy-in
Urgency
Satisfaction
Economic Value Added
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Summary
• Role Definition
• Accountability
• Empowerment
• Commitment
• Success
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Success
Higher Probability
Greater Predictability
More Choice - Risk
Better Portfolio Management
Overall Success
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Mark F. Hynnek, PMP
Project Management Specialist
Project management, Team,
Project Planning,
NPC, Education, Training,
Facilitation, and Consulting
Business Acumen
3M Learning Center
3M Center, Building 224-1N-10
St. Paul, MN 55144-1000
651 733 9141
651 733 2635 Fax
[email protected]
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Accompanying text to the presentation
Introduction
The presentation will show how a core project team can develop a project contract and use it to link management,
sponsor, and themselves into a "superteam" with greater probability of business success on new product
commercialization projects. It will also explore how the contract will truly empower the core team and demonstrate how it
will simplify project tracking and progress reporting. The contract will be the integration tool used to link project
planning, plan execution, and change throughout the project phases and spanning knowledge areas.
This presentation is based upon the experience gained over several years and hundreds of new product development,
capital improvement, and other projects facilitated by the author and other members of the former Commercialization
Services Department of 3M. The department was chartered with the development, training, and transfer of new product
introduction and project management best practices throughout 3M corporation.
The charter, planning, and contract process outlined, has been incorporated into the 3M commercialization process as it
was established by a team of over 100 individual contributors from across the corporate divisions and staff groups.
Environment
The type of environment that is being referred to in this paper is somewhat less structured general manufacturing,
research and development arena. Cross-functional teams have been used for product development projects for at least a
decade. The projects have gotten larger, more complex and the teams larger with their make up being not only crossfunctional, but cross corporate.
Even though these teams may have been cross-functional they may not always have been empowered. This
empowerment is a necessary ingredient to allow for the use of the project contract. For teams willing to stretch,
development and execution of the contract can help generate empowerment.
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The Players
The key players of the "superteam" are management, sponsor and the core project team. These people are usually
separated, by hierarchy position, task type or functional activity type. They are in effect operating in small islands
throughout the business unit. The project is the common link between these members yet they will tend to work
independently in their silos. Even though these members are the usual people, they will now be link in a new different way
- The contract.
The contract is not a true legal and not necessarily formal document. It should at least be formalized enough to bind all
parties to delivering on the agreements they document in the process. The contract essentially brings the key players
together in a manner that facilitates each to fully fulfill the role: they should play, that they are most effective at, and is
necessary to the project. The contract helps define where commitment is necessary and aids in generating the level of
commitment they should have. The responsibility the parties should bear in making the project a business success is also
defined in the contract - There are fewer cracks to fall through.
Roles
In order to sustain the business, each of the key parties involved has some specific job responsibility that may lie
outside the boundary of the project. In addition people tend to do the things they are most comfortable with - The project
may involve stretch type activities. Because of this, not all parties will fulfil the role they should play to assure project
success.
Upper management's role should be giving strategic direction, opportunity analysis / selections, portfolio management,
sponsor selection, team empowerment and project support. Strategic direction may be out of the realm of any one project,
but portfolio determination and management could actually be made easier or facilitated by the use of contracts across the
range of all the projects being done in any one business unit.
Empowerment is a core value issue and may be impacted directly by the executive style or ability to let go and trust the
process and the teams that are empowered. The contract will work to increase this trust and comfort level because issues
are clearly spelled out and responsibilities defined. Where they fail to empower core teams and actually micromanage
projects the company loses on two scores. Executives are no longer doing what they should be accomplishing, and they
are to far removed, from the task they try to micromanage, to be effective at it.
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In many cases a sponsor for the project may in fact be a member of the business unit operating committee. Even if this
is the case the selection of the sponsor should ultimately be the responsibility of the business unit executive. This selection
should be based on several criteria: highly placed in the organization, knowledgeable in the organization culture, trusted as
a counselor and coach, member of top management or quality steering team, able to remove roadblocks to progress, and a
logical choice to the project. A good choice will legitimize the project and the team throughout the organization.
The sponsor role is considered critical because they actually span between management and the team. The main role of
the sponsor is to act as an assessable source of support able to remove barriers or political issues the team may have. There
are several other activities the sponsor must do for the team: give the team the charter, kick off the project, approve the
project contract prior to final approval, support and guide project leader and team, attend management project status
reviews, team maintenance, and provide team recognition.
There is a dimension to sponsorship that is usually over looked - They need to assume responsibility for business
success of the project. This responsibility should not be delegated to the core team only. Because of this responsibility the
sponsor should be allowed to help choose the team leader and other team members. In this way the sponsor's commitment
is forged by the ability to have a part in the creation and resourcing of the team.
The metrics that may be applied to the sponsor can be made clear in the contract. The contract will provide the
framework the sponsor needs in order to define what they need to negotiate in order to make the project a success:
resources, capital, equipment, time, etc. It will also define project metrics the sponsor needs to monitor. While the contract
cannot help poor selection mechanisms, it can help the sponsor fill the pivotal spanning role.
The position is very complex due to the skills and power the sponsor must possess. This individual may not always be
as effective in the role as they need be. This usually happens due to lack of well defined selection criteria, having a
sponsor that is not responsible for the project success, and not held accountable for it.
A role whose importance was long over looked, not well understood and not fully reinforced was that of the functional
manager. The various individual functional managers play an integrating role in how projects are run. If they fail to
perform the correct role, they are in the same type of dilemma as the upper management - They can in fact contribute in
negative ways. The Functional manager's role is mainly two-fold. They are the resource, and in the case where the project
has no formal budget, the person providing funding for activities and expenses on the project.
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As a resource provider they are critical for three reasons. They can control the level of resources they allocate to any
given project from their functional departments, the maintenance of the resource commitment, and the technical skill level
of the resource that is assigned. The manager should be aware of the level of resources applied on the project as it
progresses. If they realize that more resource is required they should alert the team leader and offer to help in what ever is
way appropriate. It is also essential that the managers leave resources on the project and not redirect an individual's effort
so they are no longer able to adequately fulfil their responsibility on the project. A third more subtle resource impact the
functional manager has on projects is due to the integrity of the technology maintain within their departments. If the
overall quality of the department slips the ability to support projects falls accordingly.
In the case where new product development projects are not formally budgeted, funding must come directly out of the
functional manager's departmental budget. These budgets must then be adequately forecast on such a manner that funding
will be available for the project at the appropriate time. There can also be a degree of conflict between traditional
functional expenditures and project expenditures.
It can clearly be seen that without clear definition, the manager can fail to fill the role to provide adequate resources,
with the correct skill sets, at the right time, and adequate funding. It is not so apparent that without the contract the
manager not only may fail as the provider but can slip into a role they are not supposed to play. Without clear definition of
the contract, the functional manager will many times try to assume the role of project leader, who in many cases may
report to them. Hence the damage is negative in two ways. Project needs are not met and role conflict occurs.
There is at present no well-defined process for choosing project leaders / managers. In many cases for smaller projects
the leaders may have no experience at leading projects but have been determined to have good potential and the
appropriate skills necessary to lead a project. For larger more complex projects or programs an individual is chosen that
has proven themselves through the trial by fire, and been successful. Because there is no clearly defined selection and
training process team leaders are more or less given the opportunity to succeed or fail on their own. There are however,
many safety nets in place to help assure success if the management, sponsor, or team leader chooses to use them. There is
individual and intact team training for project management, project planning, team concepts, and leadership..
Although they are considered members of the core team, the project leaders are in a unique position with a specific role
different than the remainder of the core team members. Some of the role they need to fill is created by the fact that they
are usually working more closely with the sponsor and need to fill an integrative position between sponsor and team. The
main responsibilities of the team leader include: clarify project objectives, Maintain focus on key issues, Coordinate
activities with functional managers, Lead project team meetings, Help team deal with change, Reflect change in project
plan, Resolve conflicts and remove barriers, Report project status to management, Clarify project objectives and priorities
and help with Team maintenance.
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As mentioned earlier the team leader often may report to a functional manager as do the other core team members. This
creates a situation where the team leader has much of the responsibility and no authority over the core team members.
This situation is starting to be addressed by virtue of giving the team leader some input on the performance appraisal of
core team members.
The contract can again be used as the definitive document to specify just what the team leaders role and responsibilities
are in relation to the project deliverables, team, and managing the project.
The final role to be filled on the "superteam" is that of team member. Although it is being discussed last the team
member is by no means any less important than any of the other roles and is likely the most important. The obvious
responsibility is to do the functional and team activities necessary to complete the project. This is an over simplistic
description of what the total role responsibilities are all about.
In most cases the team members are assigned to projects because they have technical expertise relevant to the project,
have been doing preliminary concept research prior to official start of the project, or may be an available resource with the
needed skills. There are some divisions in which team members are being given the opportunity to choose which projects
they want to work on. In more and more cases team members ore coming from across corporate boundaries and may not
have meet each other before the first official kickoff or planning meeting.
The core team should be cross-functional with representation from all functions of the business unit and any
specialized resources required for successful completion. The team member's role is almost determined by its very crossfunctional nature or vice versa. Each member is fulfilling an integrative role by representing his or her functional
department to the team. The reciprocal of this is also required, they need to represent the team to the functional
department. This may seem trivial in difference, but requires the team member to take an opposite advocacy position in
each case. By representing the function they need to bring the best functional expertise possible to the team while trying to
do what will best serve the department. In representing the team to the function the member must negotiate with the
functional manager to get buy in to what they are being asked, and agreeing to commit to for the team. As an example
they may need to negotiate the level of time they need to commit to a team as a resource.
With respect to the central role, team members must be responsible to determine the work task activities for the
function they represent, achieve task assignments within schedule and cost target, and communicate progress and potential
problems to the team leader and their supervisor. All of the definition is done in a participatory style in a Team project
Planning Workshop. Once defined all are included as part of the project plan and contract. Just as in the previous cases the
contract will document just what the team member needs to deliver as a team and is further defined in the project plan
schedule. The schedule is included as a part of the contract.
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Because all team members are given the opportunity to determine, define, and author their own portions of the contract
/ plan they buy in more readily and completely than if they are just assigned their tasks. This buy in creates a much
stronger commitment to the project. In addition to the commitment, there is a much clearer understanding of: what each
individual is expected to do, team interdependence, what it will take to win in the market place, how it can be
accomplished and an appreciation of what others do and contribute.
Contract
Contract development starts once management completes project, sponsor, and team selection. With the Key players in
place, management and the sponsor should develop a relatively detailed project charter and give it to the sponsor and team
as the official empowerment document - The team is given an in-depth outline of just what is to be done, and legitimized
as a team. The charter does not tell the team specifically how to accomplish the project even though opportunity, time
window, cost target, and product performance may be outlined as targets. It is still up to the core team to fully detail the
plan and develop the contract that will document the how, realistic timeframe, and how much the project will take.
The process for development and implementation of the contract, by each core team is as follows: complete a
comprehensive team planning session: determine contract elements; present the contract proposal to upper management;
negotiate final agreement; implement the project / contract; and review project progress versus the contract.
The team kickoff is usually done as part of the comprehensive planning exercise in a facilitated Team Planning
Workshop. All members of the core team need to be present along with the sponsor and in some cases the business unit
executive for kickoff. This workshop usually takes one and one half to two full days for plan development, followed by a
one half day team follow up to compress the schedule, and to optimize and finalize plan details. These details will then be
put into the form of the contract for review, negotiation with, and approval by all key players: management, sponsor, team
leader, and core team.
The agenda, for day one, usually follows the following format: kickoff, background, process orientation, customer
expectations, goal unification, benefits documentation, assumptions recording, key issues / concerns / risk assessment,
WBS development, milestone definition, task creation (duration and required resources,) and finally interdependency
determination.There is usually some flexibility for customization to meet the needs of the specific business unit. After all
this information has been generated and recorded, it is documented and a computerized critical path project model is
generated. The model is then used in the one half day follow up session.
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The team project planning workshop has been developed and used over a period of several years. Although it may seem
simplistic, each element of the agenda is based on some specific team building need, project management principle, or
project success factor. In addition, the documentation of all the details is in affect the foundation of the contract. Kickoff,
background and process orientation help team members understand the framework in which they are expected to perform
and details of what the charter spells out, significance of the project and project management basics. Goal unification is
extremely important because the team gets the opportunity to define for themselves, or at least clarify the project objective
based upon information team members have which may be more closely aligned with reality of technical capabilities. In
any event it definitely enhances buy in.
We believe, it has been clearly demonstrated, that if there is no benefit or uniqueness to the customer a new product is
likely to fail. With this in mind, every new product development project team needs to examine and demonstrate that they
have examined this issue and determined they understand what the customer expectations are or plan to find what they
are. This gives necessary information for product performance in the contract.
In alignment with customer expectations and focused internally are the benefits for the project. While it may seem trite,
unless the team can clearly demonstrate and document benefits to the corporation and business unit that out weigh cost /
risk tradeoff, the team may decide to kill the project. While this may be clearly documented in the contract there are some
other benefits that should be reviewed. In addition the team should be easily able to develop a list of benefits to the team
and individuals. While this may not be a part of the contract it certainly helps moral, buy-in and commitment.
In choosing and accomplishing the project many assumptions may be made, some by management and some by the
team. It is vital that the team understands what these assumptions are, who made them, what their impact is if they fail to
be true, and do they conflict. The real exercise is to determine if the team is being tied to expectations that cannot be met
because faulty assumptions were made by management or there is conflict between what the team knows to be true and
what management believes to be true. If any of the assumptions is suspect it likely becomes a major concern.
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Every project team should know what its critical success factors are, or what it takes to make the project a business
success and win in the marketplace. Linked to these issues are the concerns the team may have and the risks associated
with them. If a team doesn't know what the key issues are and can spell them out in the contract management may want to
examine the situation more closely to help out or become concerned themselves. Team concerns are most often centered
on resource, short schedule, technical feasibility, or market knowledge issues. Any concern by any individual is worth
discussion and recording. Usually a concern is due to the fact that an individual has or doesn't have some piece of
information they need to feel comfortable about the project. They can be easily removed with information from the team
or they can prevent a major problem for the team if they get the information up front and act proactively. If a concern isn't
raised it may come back later to haunt the project. The relation of concerns to risks is clear and risks need to be clearly
spelled out, understood, and some mitigation plan put in place. The risks, probability, and impact should be spelled out in
the contract as to what will happen to the project if they occur i.e. Scope change; schedule and cost increase, performance
loss etc.
The next part of the contract development is the definition of the work to be done. If the project is very complex or a
possible government project the team will develop a work breakdown structure to aid in the planning and development of
the tasks necessary to accomplish the project. Although contrary to project management methodologies many times the
milestones and tasks can be developed without doing a work breakdown structure. This is partly true because the divisions
use New Product Commercialization processes based on a corporate model. These NPC systems define many of the tasks
necessary to complete a new product commercialization. In any event the WBS can be developed from structuring the task
list and does help to develop the task list if done in advance.
The Milestones are defined as a team and laid out using Post-It notes. Once the milestones are defined the team can
now break up into breakout groups relative to certain task groups that need to be defined and developed. This is a series of
negotiation sessions where the individuals negotiate with others about the deliverables they will need in order to perform
their own tasks. Task duration and resources are also defined through this negotiation process. Once all the work tasks are
written on Post-It notes the team is ready to determine how all the work will flow. Every task must have an owner who
is responsible to the team for its completion. These responsibilities become part of the contract by schedule inclusion.
The work tasks are now placed in sequence with the milestones and all predecessor / successor relations established.
When this data is entered into project management software the critical path and time schedule is established and a project
network printed. In a one half day follow up session the team goes over the plan network to confirm the data, compress the
time line and finalize the schedule and plan. Once finalized it is formatted into a project contract containing all the data.
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The sponsor first reviews the plan and contract as developed by the core team if approved, the plan contract is presented
to the division operating committee for approval and agreement.
What each key player is responsible to deliver in order to make the project a success is clearly defined. With the contract
approved, the project can proceed and be tracked against the metrics and deliverables included in the contract.
Conclusion
Every one on the "superteam" gains many benefits by employing the project contract. The contract provides a strong
linking bond between the three key parties, management, sponsor, and core team. Communication is increased and
clarified, leading to better understanding between all members. Roles are better defined, which affords better fulfillment
of those roles and less role conflict due to members doing inappropriate role activity. There is a heightened sense of trust
built between all members because of the greater understanding and definition of deliverables for each.
Greater trust by management can allow them to be more comfortable in totally empowering the core team. By being
empowered and given power of co authorship, the core team will be committed Vs just compliant. Accountability will be
shared and increased by all parties due to clear definition of contract responsibilities. Project team effectiveness is
increased by proper delegation of project activities, roles, and accountability. Because activities are being accomplished
with the least amount of transference between "superteam" members, efficiency is also greater. When all these benefits are
accrued the ultimate benefit is achieved - The overall business success is greater.
In closing it is again worth mention that the environment this type of methodology is used in is rather unstructured with
less well defined work packages than in the construction or department of defense type project. The organization is many
separate business units, each with their own functional groups and some corporate technology centers for some special
technologies. The projects tend to be new product development / commercialization projects where the core team is
cross-functional, consisting of about 8 to 12 members. Extended team membership could range up to 35-50 persons. Many
projects, in addition to being cross-functional, are cross-corporate.
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