Brand Action—Responsibility

Project control was one of the first things changed. Historically, the IT department exclusively controlled most projects. The company’s project managers even reported to the CIO. As former chief financial officer, Eric Schornhorst commented, “Most projects had weak or missing sponsorship on the business side. To better establish project responsibility, we moved the project managers out of IT, and we now assign them to work with a business unit manager for large-scale projects only. The project managers play more of an administrative and facilitating role, with the business unit manager actually providing project leadership.” We updated our leadership curriculum, which all managers must complete, to include a very basic project management course, laying the foundation for further professional development in this area.

Guiding Principle—Make It Easy

With project ownership more clearly established, we also simplified our project planning and tracking process. We began tracking all large corporate and divisional projects on a single spreadsheet that was reviewed by the executive team monthly. (See Table 6-3 for the report headers.) Project priority was tied directly to our strategic initiatives. Our limited resources were then applied to the most impactful and most critical projects. Eric Schornhorst commented, “Simplifying project management forms and processes has enabled us to focus more on identifying potential roadblocks and issues. We are much better at managing project risk.”

Brand Action—Goals

Chief information officer Vince Pittiglio recalled the legacy issue of IT overcommitment.

Without effective strategic and tactical planning, we used to manage more of a project wish list than a true portfolio of key projects. We in IT would put our list of key infrastructure projects together each year. As the year progressed, individual managers would add new projects to our list. Often, many of these projects had little to do with what we were really trying to achieve strategically. We had more projects than we could do effectively, and to be honest, we often prioritized projects based on IT’s convenience, rather than on what was best for the organization and our members.

Focusing on key initiatives made it possible to say no to low-priority projects that were non-value-added or simply not in our members’ best interest. And the new measuring stick for project success was not merely whether the IT portion of the project was completed but rather that the project met its larger objectives and contributed to the company’s success as a whole.

Brand Action—Teamwork

Historically, DFCU Financial was a strong functional organization. Cross-departmental collaboration was rare and occurred only under very specific conditions. This cultural dynamic did not provide an optimal environment for projects. The monthly project review meeting brought together the entire executive team to discuss all current and upcoming projects. The team decided which projects were in the best interest of the organization as a whole. This critical collaboration contributed to building much more effective, cross-functional project teams. We began to develop a good sense of when a specific team or department needed to get involved in a project. We also gained a much better understanding of the concept that we will succeed or fail together and began working together better than ever.

Brand Action—Empowerment

As now-retired chief operating officer Jerry Brandman pointed out:

Our employees have always been positive and pleasant. But our employees were never encouraged to speak their minds, especially to management. This often had a direct negative impact on projects—people foresaw issues, but felt it was not their place to sound the alarm. A lot of the fear related to not wanting to get others “in trouble.” We have been trying to make it comfortable for people to raise issues. If the emperor is naked, we want to hear about it! To make people visualize the obligation they have to speak up, I ask them to imagine they are riding on a train and that they believe they know something that could put the trip in jeopardy. They have an obligation to pull the cord and stop the train. This has not been easy for people, but we are making headway every day.

Brand Action—Quality

At DFCU Financial project implementation in the past followed more of the big bang approach—implement everything all at once to everyone. When the planets aligned, success was possible. More often than not, however, things were not so smooth. Commented Jerry Brandman, “You have to have a process for rolling things out to your public. You also need to test the waters with a small-scale pilot whenever possible. This allows you to tweak and adjust your project in light of real feedback.” Most employees have accounts at DFCU Financial, so we found we had a convenient pilot audience for major projects such as ATM to debit card conversions and the introduction of eStatements to ensure everything functioned correctly prior to launching to the entire membership.

Bottom line, the most significant best practice at DFCU Financial has been to be true to our core cultural value of providing extraordinary service. As we were working on defining this value and finding ways to make it actionable, we were also making changes to the way we approach project management that were very well aligned with our values. Our commitment to living our brand helped us:

• Move project responsibility from IT to the business units
• Simplify project management forms and processes
• Use project review meetings to set priorities and allocate resources more effectively
• Break down organizational barriers and encourage input on projects from individuals across the organization
• Improve project success through pilots and feedback

As president and CEO, Mark Shobe summarized back in 2005:

Good things happen when you have integrity, when you do what you say you are going to do. The improvements we have made in handling projects have rather naturally come out of our collective commitment to really live up to our brand promise. Have we made a lot of progress in how we manage projects? Yes. Is everything where we want it to be? Not yet. Are we moving in the right direction? You bet. And we have a real good roadmap to get there.

Brand Actions—Voice and Quality; Guiding Principle—Make Their Day

While DFCU’s executive team and board of directors explored several growth options, work on selection of a new core processing system began in mid-2005. The core system conversion project was viewed as a strategic imperative for growth, regardless of DFCU’s operating structure. The prior system conversion in 2000 suffered from poor execution that left behind lingering data and process issues that needed to be addressed. At the start of the conversion project, which began formally in January 2006, the conversion was targeted for October of that same year. From the outset, however, we ran into difficulties with the system vendor. The vendor was going through one of its largest client expansions ever and was having a hard time satisfying all of the demands of the conversion projects in its pipeline. The impact to us was noticeable—high turnover in key vendor project team members, poor-quality deliverables, and lack of responsiveness to conversion issues. Due to the poor quality of the data cuts, the project conversion date was at serious risk by June.

Due to its scope, the system conversion project was the only corporate project commissioned in 2006, and all attention was on it. It was not an easy task, therefore, to deliver the message that the project was in trouble. “Mark was well aware that we were having difficulties when we sat down to discuss whether we would have a smooth October conversion,” commented chief information officer Vince Pittiglio. “I have had to deliver bad news before to other bosses, but the talk I had with Mark was a lot different than those I had before.” Our stated objective of this conversion was basically to do no harm. We all agreed that we could not put our members or our employees through the same type of conversion we experienced in July 2000. It had to be as close to a nonevent as possible. According to Pittiglio, “I laid out the key issues we were facing and the fact that none of us on the project believed they could be resolved by the October date. If we kept to the original date, we believed we would negatively impact member experience.” But our CEO, Mark Shobe, was very clear—he insisted that this project be a quality experience for both members and employees, as we all had agreed at the outset, and he was willing to go to the board to bump the date and to put other key initiatives on hold to ensure the conversion’s success. The project team agreed on a revised conversion date in early June 2007. According to conversion project manager and senior vice president Martha Peters:

Though the team continued to face difficulties with the vendor, we worked hard and got it done without any major issues. It made a real difference to know that the chiefs and the board took our feedback seriously. In the end, it really was a nonevent for most of our members and employees, exactly as we all wanted it to be. It was a tough decision to postpone the conversion, one that many companies are not willing to make. But it was the right decision to make—we really try to live our brand.

Brand Action—Clarity and Teamwork

By the time the system conversion was completed in June 2007, we had really only engaged one project in the previous two years, albeit a large-scale project of strategic importance—which was consciously delayed by eight months. This project drained our resources, so little else was accomplished in those two years. “Coming out of the system conversion was this huge, pent-up project demand. And everyone thought that the issues facing their division were, of course, the most pressing,” commented former chief financial officer Eric Schornhorst. “We found out very quickly that our handy project tracking list and monthly corporate project meeting were insufficient tools for prioritizing how to deploy our scarce project resources.” A small team was quickly assembled to put together a process for initiating and approving projects more effectively and consistently. A key objective for this team was to minimize bureaucracy while trying to establish some useful structure, including a preliminary review of all new requests by the IT division. The output was a simple flow diagram that made the steps in the request and approval process clear to everyone (see Figure 6-7) and a form that integrated the instructions for each section. As the senior vice president of human resources related at the time:

My group was one of the first to use the new process. It was surprisingly well put together and easy to use. We made the pitch to replace our learning management system with a more robust, outsourced solution. It was one of the projects that made it on the 2008 list. To be honest, we were really at the point in our company’s history where we needed a bit more discipline in this process. In years past, we independently advocated for our projects at budget time with our division heads. If we received budgetary approval, we viewed our project as “on the list.” When it came time to actually execute, however, we often had trouble lining up the resources from all the different areas that needed to be involved, especially those in IT.

The new process contributed not only to clarity regarding corporate projects but to teamwork as well. As Schornhorst had reflected in late 2008:

We reviewed the projects requested for 2009 using the new process. While we haven’t completely addressed the backlog of projects created by the system conversion, we also have another project likely to take over the majority of resources in 2009. This is not good news for areas that have not yet seen their projects addressed. What’s interesting though is how little contention there was as we reviewed the docket for 2009—and we had to put many important things on the back burner. I think that when you have everyone review the facts together in lock step, it’s easier to get to a set of priorities that make sense for the organization and are mutually supported regardless of personal interest. It helps to bring the best out in all of us.

So Where Was the Road Headed?

In early 2009, DFCU Financial was poised for membership growth. After a review of charter options, the board and executive team decided to remain a credit union but to pursue other avenues for growth. To that end, as 2009 began, the board put forth for vote a proposal to DFCU’s membership for a merger with CapCom Credit Union, which had nine branch locations in the lower central and western areas of Michigan. According to former chief operating officer Jerry Brandman:

We considered many different options to address our strategic vision for growth and expansion in membership—from mergers to various internal growth strategies. While we in the credit union industry currently face the same challenges as other financial institutions, we also are an industry known for service. And here at DFCU Financial we not only talk about service—we deliver. Our employees are happy and enthusiastic. They treat our members very well. We have been rated in the top 101 companies to work for in southeastern Michigan for five years in a row, based on feedback from our employees. And we have a member shops program that shows us how our service stacks up to industry benchmarks. We have consistently performed at the highest level of service relative to our peers. Merging with CapCom and shifting to a community charter will provide us the growth we need to ensure a bright future for our members and our employees. It will allow us to spread the DFCU brand to other geographic areas. We believe this proposal will be appealing to our members and will be successful. We believe that people want to be a part of our organization.

And for good reason. Also in early 2009, DFCU Financial paid out a $17 million patronage dividend to its members for the third consecutive year, for a total of more than $50 million being paid out since inception, during one of the worst economic times to hit the Motor City in decades. According to Keri Boyd, senior vice president of marketing at the time, “Since we are committed to remaining a credit union, we have looked at ways we could improve our value proposition to existing members and attract new members. The patronage dividend is the cornerstone of our approach to growing the business as a credit union.” As Mark Shobe summed it up:

The board and I did not want to begin the payout until we were confident that we could sustain it over the years. It took hard work, some tough decisions, excellent project execution and diligence in our day-to-day operations to be in the position to share our success with our membership. The simple truth is that the driving force behind our success is our collective commitment to our brand.

So, with a 2009 schedule of agreed-on projects, a potential merger in the offing, and some very, very satisfied members, how is the DFCU roadmap working? “Quite well, thank you!” replied Mark.

Brand Is Still How We Do It

When we grow by building new branches, the DFCU Financial brand extends rather naturally. In new branch projects, all elements of brand are well controlled—from the look and feel of the facility, to the training and on boarding of new employees, even to the project methodology we use. Growth by merger is not as organic. Ensuring that brand is protected through these projects is no small feat. According to president and CEO Mark Shobe, “In seeking potential merger partners, we look for organizations that are not only a good fit strategically, but which also ostensibly share our core values. But no matter how well suited the match appears to be, the biggest challenge in any merger project is culture.”

Brand Action—Goals and Clarity

CapCom was the first merger DFCU Financial completed during this period. It provided us access to two new geographical markets, but most important, it presented us with an opportunity for charter change. Originally a federally chartered credit union, DFCU Financial is now a state-chartered community credit union that has growth access to all counties in Michigan’s lower peninsula. To change the charter required a vote of the membership. The membership charter vote was one of the most important tasks within the scope of the CapCom merger project. According senior vice president for strategic marketing and operations Martha Peters, who was the CapCom merger project manager:

For us to achieve what we set out to with this merger, we not only needed to successfully integrate systems and functional areas, we also needed to make a compelling argument to our existing membership base to change our business structure. In making both things happen, we leveraged our brand. We needed to assure our existing members that we would be the same DFCU they had relied on—only better, while at the same time we had to demonstrate to our new CapCom colleagues how they and the members they historically served would benefit by adopting the DFCU Financial culture. To facilitate our success on this project, we were very careful about how we structured the project and communicated our goals. We established a steering committee, comprised of DFCU and CapCom executives, which was responsible for making all major project decisions and assessing and communicating the member and staff impact of these decisions. This structure helped us to keep a pulse on employee and member feedback and to address project risk very effectively.

All key objectives of this project were met—the charter change, the functional integration, the legal merger, and the system integration—and, more important, the DFCU Financial brand came out a winner.

Brand Actions—Respect and Responsibility; Guiding Principle—Make It Easy

As the CapCom merger was successfully wrapping up, I was assigned as project manager for the MidWest Financial merger. While charter change figured heavily in the CapCom merger, it was also a project where we learned a lot about how to do mergers. Since we conducted a formal lessons learned exercise coming out of the CapCom merger, I was able to reuse the elements that worked and focus on the areas that needed strengthening.

Being a small company, we do not have dedicated project management resources. Front-line and back-office business unit managers and their teams are expected to participate as project team members and often serve as project managers. In our merger projects, all managers are responsible for all functional integration tasks that relate to their business unit. They are essentially the project manager for their functional area. Managers whose operations are tightly coupled with the core computer system have even greater responsibility to ensure that data from the relinquishing system is safely and correctly converted into the surviving system. It is a daunting set of responsibilities.

One of the lessons learned from the CapCom merger is that these responsibilities were not clear to everyone, so we had varying degrees of compliance with project methodology. By the same token, we all learned together on that first merger what the big pieces were and how they fit together. To build on what we learned from CapCom, I worked with the executive team to develop a project charter that explained project scope, goals, structure, and participant responsibilities and featured the review of this document at the kickoff meeting. Then, to make this large-scale project more manageable for the business unit managers, I pulled together the small set of tools that everyone was required to use—our usual project database in Lotus Notes, a simple task list template in Excel, and a simple status reporting template—and clearly articulated the rules of engagement: (1) the tools had to be proactively used; (2) tasks lists and status reports posted by deadline to the database; and (3) the project manager for each area had to review their written, posted status report at each project meeting with the entire project team. I made myself readily available to anyone who needed help using the tools and was happy to see the extent to which we increased our project management competency through this project.

The methodology requirements and tool set we insisted on project leads and participants using for the MidWest project paid big dividends for us, and not just for that merger project.

Brand Actions—Empowerment, Responsibility, and Quality

With two mergers happening back to back and the first occurring not too long after our major core system conversion in 2007, our project backlog was growing by the day. A real moment of reckoning occurred in October 2010 when the MidWest merger was still in full swing. One of the issues that had arisen during the CapCom merger related to cash dispenser machines (CDMs). All original DFCU branches had CDMs serving each teller window. CapCom’s branches did not. Rather than purchasing CDMs for CapCom, we rewrote dozens of cash operations procedures to accommodate branches with and without CDMs. While this solved the immediate issue, branch senior management did not like the complexity this inserted in operations. Also having other, more technical concerns about CDMs, the management team decided to evaluate deimplementing CDMs. They quietly worked on a pilot in one of the busier branches. They liked the result, and decided to move immediately to deimplementation system-wide. In short order, we had another project happening somewhat under the radar in the midst of a merger. It was time to pull the brake on the train. According to Steven Schulman, senior vice president of branch development:

There I was, recently promoted to SVP and my first big task was to get rid of our CDMs. No big deal, right? All of a sudden, I’m facing lots of questions from other managers — Have you thought about the impact to procedures? Are the units fully amortized? Is Facilities going to patch the teller cabinetry—do they have budget for that? Do we need to remove the CDM cash boxes from the system? And so on. I felt I was doing the right thing, but it became clear to me that to do it right way, I needed to follow our normal project management protocols. Lessons learned!

The CDM deimplementation project was a watershed moment for us on a number of levels. It was absolutely the right thing to do and was probably not wise to put off for much longer. At that same time, all of us business unit managers had numerous projects of both large and small scale on our to-do lists, and some of them, just like this one, really needed to proceed—in spite of the merger. So, for the benefit of all parties concerned, we really needed to push out our project methodology and tool set to a much broader audience. So, we got Steven the tools he needed to get his project done and then spent 2011 not only finishing the MidWest merger but also putting into place some improvements in how we manage projects and communicate about them. Though we still use dedicated databases for large-scale projects like mergers, we rolled out the Corporate Projects database in Lotus Notes that contains project templates and provides a place to post documents for all active projects. (See Figure 6-8.)

In late 2011, we also introduced a formal Business Change Process designed to ensure that we avoid another surprise project like CDM deimplementation. The process is light on bureaucracy and requires business unit managers to start the conversation by putting in a quick ticket to a support database that describes the problem they need to solve or the project they believe needs to be engaged. We have a small business change committee, comprised of representatives from each division, that reviews the tickets each week to better understand the scope of each initiative and to determine which areas need to be involved. In some cases, business change tickets move on to corporate project stature, subject to our formal project management protocols. In most cases, however, the business change initiatives proceed as small-scale projects that are worked on as time permits, in deference to the approved corporate projects and the required recurring projects, such as core system updates and tax reporting.

Along with this process change, we created a new project list that summarizes all projects in play at any given point in time and allows management to understand not only project priorities but where the resources across the company are currently committed. (See Figure 6-9.) The list is released monthly to all management, who are encouraged to take the time to review what is on the list and to share what they feel is appropriate with their teams. The intent of new project list is to ensure better transparency on how resources are being deployed on projects and to build awareness on initiatives that will eventually impact staff and/or members.

And the Brand Lives On

We have had significant financial success over the last several years, and the executive team is very focused on sustaining that success over the long haul. The DFCU Financial brand guides us in what we need to do and, in many cases, how and when we need to do it. Our brand has had a lot to do with shaping how we approach projects because it reflects how we think about ourselves and what we want to achieve. We will continue to make progress as we can on our strategy of managed growth. Our recently completed branch expansion study will inform our decisions for building new branches, and though the environment is changing, we continue to look for merger opportunities. At the same time, we are looking carefully for ways to improve, to take our products, services and processes to the next level. So, as we start 2013, we have plenty of projects and initiatives in the works that found their starting point in brand.

Brand Action—Protect

Like other financial services organizations, DFCU Financial has been facing lower net interest revenue due to the repricing of our loan and investment portfolios caused by the protracted low-rate environment and increasing pressure on fee income from what is described as “consumer protection.” This has translated into a loss about $6 million annually for DFCU over the last several years. Chief financial officer Marv Elenbaas has been keeping the management team focused on a couple of key metrics that are extremely important to watch during times of tight margin compression: core net operating revenue growth and core noninterest expense growth. He also demonstrates the impact the environment is having on us by including in the monthly financials the average earning asset yield for the past five quarters, which went from 3.34 percent at the end of the fourth quarter 2011 to 2.66 percent at the end of the fourth quarter 2012. By building awareness about the impact the environment was having on our core financials, Marv was able to make the case and gain support for a project to perform a thorough review and analysis of our fee structures. But feeing members is a topic about which different areas in the credit union have very passionate, and often diametrically opposed, views. And these views are solidly rationalized against our brand. To ensure a productive, collaborative analysis and decision-making process, Marv looked to an objective third party to facilitate the review. The key project deliverable was a set of fee change recommendations. According to Marv:

The fee changes agreed on through this project are well supported and well understood by all parties and, most importantly, reflect a balance of our brand principles. The plan addresses the critical need for increasing our revenue stream over the next few years. At the same time, it ensures that DFCU continues to offer a solid value proposition to members. Not only have members benefited from the downward repricing of loan rates, we are still positioned as less aggressive on fees when benchmarked with our peers, allowing us to maintain our “make their day” claim in the marketplace. It is not often that stakeholders from finance, customer service, and marketing agree on a topic like fees, but we came pretty close.

Guiding Principles—Make Their Day and Make It Easy

One of the major infrastructure projects engaged as we wrapped up the recent mergers was the implementation of a new, robust enterprise content management system. While the initial phases of this multiyear initiative are unremarkable, though foundational—replacing the existing document archive and converting content—the later phases are expected to delight employees and members by capturing signatures electronically on account paperwork, eliminating the handling and movement of paper, providing expanded self-service eDocuments to members, and moving from paper vouchers and receipts on the teller line to eReceipts—things our employees and members have been requesting for a while as more and more businesses go green.

Brand Action—Voice

To ensure that we sustain our position as a preferred employer and to strengthen employee retention, which is sure to be challenged as the Michigan economy improves, human resources launched a new and improved employee suggestion process at our annual employee meeting in January 2013. This solid commitment to listening to employee feedback will no doubt be the starting point for projects and initiatives designed to attract and retain the talent DFCU will need to take our business to the next level.

Brand Action—Promise

WE are focusing on assessing and improving internal customer service. According to Keri Boyd, executive vice president for corporate development:

Our front-line staff who provide direct member service have been shopped for years—and their scores are impressive. But we have been asking ourselves: Can we be even better? This questioning has led us to look more broadly at the service delivery process. When front-line team members need help, they seek it from our back office areas—whether IT, operations, underwriting, collections. We want to ensure that those interactions are as supportive, positive and effective as possible. We are all part of the service value chain. Looking closely at internal service, we will be able to identify areas for improvement.

Guiding Principle—Be an Expert

A critical component of outstanding member service is competence, hence the call to “be an expert.” When we were going through our core system conversion, everything was new for every area, so documenting detailed procedures was an imperative component of that project. Policy and procedure loomed large in the merger projects as well since we needed to ensure new team members were clear on the DFCU way. According to delivery channel support supervisor Kelly Kidwell:

We now have a very seasoned team, yet we are seeing some evidence of a literal reliance on our written knowledge base which sometimes gets in the way of effective problem solving and decision making when providing member service. This is a big concern for me as my area writes and maintains all operational policies and procedures and provides phone support to front-line team members on operational matters.

To begin to address this trend, Kelly initiated a “solve the right problem” campaign with her team and is coaching them to improve their listening and facilitation skills when providing support to the front line and is encouraging internal discussion about what is working and what is not. This initiative has already helped identify the need to overhaul our service delivery processes for deceased and fiduciary accounts.

Guiding Principle—Make It Easy

While we were focused on system conversion and mergers, we did not have the band width to address our delivery channels. As Martha Peters, senior vice president for strategic marketing and operations, notes:

We had to keep some things constant. Mergers and conversions present huge changes by themselves. We could not risk also making channel changes, which are always disruptive to our members. So, needless to say, the last couple of years have been all about the channels. In 2012, I led projects to switch out our ATM terminal driving platform, and launch our mobile banking application. We are currently going through the RFP [request for proposal] process to replace our internet banking channel. That change was targeted and completed in 2014. A key strategic requirement for all of these initiatives is to simplify our solutions and make it easier for us to change and improve. To do so, we need to move from our currently highly customized platforms to solutions that will allow us to adapt more rapidly to changes in technology and in the marketplace.

As DFCU Financial embarks on the next leg of its journey, the roadmap is more about honing expertise, improving the quality of service delivery, and being successful and nimble in an increasingly wired world. And, as usual, the “how” of our journey will be guided by our interest in sustaining and building on our success and leveraging our brand to do so.

Centralization of Authority

Many countries maintain a culture in which very few people have the authority to make decisions. Decision making rests in the hands of a few, and it serves as a source of vast power. This factor exists in both privately held companies and governmental organizations. Project management advocates decentralization of authority and decision making. In many countries, the seniormost level of management will never surrender authority, power, or right to make decisions to project managers. In these countries, an appointment to the senior levels of management is not necessarily based on performance. Instead, it is based on age, belonging to the right political party, and personal contacts within the government. The result can be executives who possess little knowledge of their own business or who lack leadership capacity.

Executive Sponsorship

Project sponsorship might exist somewhere in the company but most certainly not at the executive levels. There are two reasons for this. First, senior managers know their limitations and may have absolutely no knowledge about the project. Therefore, they could be prone to making serious blunders that could become visible to the people who put them into these power positions. Second, and possibly most important, acting as an executive sponsor on a project that could fail could signal the end of the executive’s political career. Therefore, sponsorship, if it exists at all, may be at a low level in the organizational hierarchy, and at a level where people are expendable if the project fails. The result is that project managers end up with sponsors who either cannot or will not help them in time of trouble.

Organizational Hierarchy

In the United States, project managers generally have the right to talk to anyone in the company to get information relative to the project. The intent is to get work to flow horizontally as well as vertically. In some emerging market nations, project managers must follow the chain of command. The organizational hierarchy is sacred. Following the chain of command certainly elongates the decision-making process to the point where the project manager has no idea how long it will take to get access to needed information or for a decision to be made, even though a sponsor exists. No mature infrastructure is in place to support project management. The infrastructure exists to filter bad news from the executive levels and to justify the existence of each functional manager.

In the United States, the “buck” stops at the sponsor. Sponsors have ultimate decision-making authority and are expected to assist project managers during a crisis. The role of the sponsor is clearly defined and may be described in detail in the enterprise project management methodology. But in some emerging market countries, even the sponsor might not be authorized to make a decision. Some decisions may need to go as high as a government minister. Simply stated, it is not always clear where and when the decision needs to be made and by whom it will be made. Also, in the United States, the project sponsor is responsible for reporting bad news. In some nations, the news may go as high as government ministers. Simply stated, you cannot be sure where project information will end up.

Improper but “Legal” Laws

Some laws in emerging market nations may be viewed by other nations as explicitly or implicitly condoning acts that would be illegal or elsewhere. Yet American project managers who partner with these nations must abide by those laws like any other. As an example, procurement contracts may be awarded not to the most qualified supplier or to the lowest bidder but to any bidder that resides in a city with a high unemployment level. As another example, some nations have laws that imply that bribes are an acceptable practice when awarding contracts. Some contracts might also be awarded to relatives and friends rather than the best-qualified supplier.

Potential for Corruption

Corruption can and does exist in some countries and plays havoc with project managers who focus on the triple constraints. Project managers traditionally lay out a plan to meet the objectives and the triple constraints. They also assume that everything will be done systematically and in an orderly manner, which assumes no corruption. But in some nations, potentially corrupt individuals or organizations will do everything possible to stop or slow down the project, until they can benefit personally.

Legal Formalities and Government Constraints

Here in the United States, we believe that employees who perform poorly can be removed from the project or even fired. But in some emerging market nations, employees have the legal right to hold a job even if their performance is substandard. There are laws that clearly state under what conditions a worker can be fired, if at all.

There are also laws on the use of overtime. Overtime may not be allowed because paying someone to work overtime could eventually end up creating a new social class. Therefore, overtime may not be used to maintain or accelerate a schedule that is in trouble.

Insecurity

Executives often feel more insecure than the managers beneath them because their positions may be the result of political appointments. As such, project managers may be seen by executives as the stars of the future and may be viewed as threats. Allowing project managers who are working on highly successful projects to be thet one to make presentations to the seniormost levels of management in the government could be seen as a threat. Conversely, if the project is in trouble, then the project manager may be forced to make the presentation.

Status Consciousness

Corporate officers in some cultures, particularly in some emerging market nations, are highly status conscious. They have a very real fear that the implementation of project management may cause them to lose status, yet they refuse to function as active project sponsors since this, too, may result in a loss of status if the project fails. Status often is accompanied by fringe benefits, such as a company cars and other special privileges.

Social Obligations

In emerging market nations, social obligations dictated by religious customs and beliefs or by politics may be more important than they would be in first-world nations. Social obligations are ways of maintaining alliances with those who have put an executive or a project manager in power. As such, project managers may be allowed to interface socially with certain groups but not others. This could also be an obstruction to project management implementation.

Internal Politics

Internal politics exist in every company in the world. Before executives consider throwing their support behind a new approach such as project management, they worry about whether they will become stronger or weaker, have more or less authority, and have a greater or lesser chance for advancement. This is one of the reasons why only a small percentage of emerging market companies have PMOs. Whichever executive gets control of the PMO could become more powerful than other executives. In the United States, we have solved this problem by allowing several executives to have their own PMO. But in emerging markets, this method is viewed as excessive headcount.

Unemployment and Government Constraints

Virtually all executives understand project management and the accompanying benefits, yet they remain silent rather than visibly showing their support. One of the benefits of project management implementation is that it can make organizations more efficient to the point where fewer resources are needed to perform the required work. This can be a threat to an executive because, unless additional business can be found, efficiency can result in downsizing the company, reducing the executive’s power and authority, increasing the unemployment level, and possibly increasing poverty in the community. Therefore, the increased efficiencies of project management could be looked on unfavorably.

Attitude toward Employees

In some nations, employees might be viewed as stepping-stones to building an empire. Hiring three below-average workers to do the same work as two average workers is better for empire building, yet possibly at the expense of the project’s budget and schedule. While it is true that finding adequate human resources may be difficult, sometimes companies simply do not put forth a good-faith effort in their search. Friends and family members may be hired first regardless of their qualifications. The problem is further complicated when people with project management expertise are sought.

Inefficiencies

Previously, we stated that companies might find it difficult to hire highly efficient people in project management. Not all people are efficient. Some people simply are not committed to their work even though they understand project management. Other people may get frustrated when they realize that they do not have the power, authority, or responsibility of their colleagues in first-world countries. Sometimes new hires who want to be efficient workers are pressured by the culture to remain inefficient or else the individual’s colleagues will be identified as poor workers. Peer pressure exists and can prevent people from demonstrating their true potential.

Lack of Dedication

It is hard to get people motivated when they believe they cannot lose their jobs. Most people are simply not dedicated to the triple constraints. Some may even prefer to see schedules slip, believing it provides some degree of security for a longer period of time. There is also a lack of commitment to see the product through to project closure. As a project begins to wind down, employees will begin looking for a home on some other project. They may even leave their current project prematurely, before the work is finished, to guarantee employment elsewhere.

Misinformation

People working in emerging market countries may feel they must hide things from fellow workers and project managers, especially bad news, out of necessity, either to keep their jobs, their prestige, or to retain their power and authority. This creates a problem for project managers who rely on timely information, whether good or bad, in order to manage the project successfully. Delays in reporting could waste valuable time during which corrective action could have been taken.

Cost of Implementation

There is a cost associated with the implementation of project management. The company must purchase hardware and software, create a project management methodology, and develop project performance reporting techniques. Doing this requires a significant financial expenditure, which the company might not be able to afford, and also requires tying up significant resources in implementation for an extended period of time. With limited resources, and because the better resources would be required for implementation and would be unavailable for ongoing work, companies shy away from project management even though they know the benefits.

Risk of Failure

Even if a company is willing to invest the time and money for project management implementation, there is a significant risk that the implementation will fail. Even if the implementation is successful, if projects begin to fail for any number of other reasons, blame will be placed on faulty implementation. Once executives have to explain the time and money expended for no real results, they may find their positions in the hierarchy insecure. This is why some executives refuse to accept or to visibly support project management.

Training Limitations

Implementation of project management is difficult without training programs for the workers. This creates three additional problems:

1. How much money must be allocated for training?
2. Who will provide the training, and what are the credentials of the trainers?
3. Should people be released from project work to attend training classes?

Training people in project management is time consuming and expensive. The costs of both implementation and training might prevent some executives from accepting project management.

Need for Sophistication

Project management requires sophistication, not only with the limited technology or tools that may be available but also in the ability of people to work together. This teamwork sophistication is generally lacking in emerging market countries. People may see no benefit in teamwork because others may be able to recognize their lack of competence and mistakes. They have not been trained to work properly in teams and are not rewarded for their contribution to the team.

Lack of Closure on Projects

Employees are often afraid to be attached to the project at closure when lessons learned and best practices are captured. Lessons learned and best practices can be based on what we did well and what we did poorly. Employees may not want to see anything in writing that indicates that best practices were discovered from their mistakes.

Work Ethic

In some nations, the inability to fire people creates a relatively poor work ethic, which is contrary to effective project management practices. There is a lack of punctuality in coming to work and attending meetings. When people do show up at meetings, only good news is discussed in a group; bad news is discussed one on one. Communication skills are weak, as is report writing. There is a lack of accountability because accountability means explaining your actions if things go bad.

Poor Planning

Poor planning is paramount in emerging market nations. There exists a lack of commitment to the planning process. Because of a lack of standards, perhaps attributed to the poor work ethic, estimating duration, effort, and cost is very difficult. The ultimate result of poor planning is an elongation of the schedule. Workers who are unsure about their next assignment can viewed this as job security at least for the short term.