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Case: Macon, Inc.

Macon, a tire test equipment company, faced internal departmental conflicts, particularly between its engineering and production teams. As a result, customers began overseeing Macon’s deliverables directly. The president acknowledged the urgent need for enhanced project management, but the solution remained uncertain.

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Macon was a fifty-year-old company in the business of developing test equipment for the tire industry. The company had a history of segregated departments with very focused functional line managers. The company had two major technical departments: mechanical engineering and electrical engineering. Both departments reported to a vice president for engineering, whose background was always mechanical engineering. For this reason, the company focused all projects from a mechanical engineering perspective. The significance of the test equipment’s electrical control system was often minimized when, in reality, the electrical control systems were what made Macon’s equipment outperform that of the competition. Because of the strong autonomy of the departments, internal competition existed. Line managers were frequently competing with one another rather than focusing on the best interest of Macon. Each would hope the other would be the cause for project delays instead of working together to avoid project delays altogether. Once dates slipped, fingers were pointed and the problem would worsen over time. One of Macon’s customers had a service department that always blamed engineering for all of their problems. If the machine was not assembled correctly, it was engineering’s fault for not documenting it clearly enough. If a component failed, it was engineering’s fault for not designing it correctly. No matter what problem occurred in the field, customer service would always put the blame on engineering.

As might be expected, engineering would blame most problems on production claiming that production did not assemble the equipment correctly and did not maintain the proper level of quality. Engineering would design a product and then throw it over the fence to production without ever going down to the manufacturing floor to help with its assembly. Errors or suggestions reported from production to engineering were being ignored. Engineers often perceived the assemblers as incapable of improving the design. Production ultimately assembled the product and shipped it out to the customer. Oftentimes during assembly the production people would change the design as they saw fit without involving engineering. This would cause severe problems with documentation. Customer service would later inform engineering that the documentation was incorrect, once again causing conflict among all departments. The president of Macon was a strong believer in project management. Unfortunately, his preaching fell upon deaf ears. The culture was just too strong. Projects were failing miserably. Some failures were attributed to the lack of sponsorship or commitment from line managers. One project failed as the result of a project leader who failed to control scope. Each day the project would fall further behind because work was being added with very little regard for the project’s completion date. Project estimates were based upon a “gut feel” rather than upon sound quantitative data.

The delay in shipping dates was creating more and more frustration for the customers. The customers began assigning their own project managers as “watchdogs” to look out for their companies’ best interests. The primary function of these “watchdog” project managers was to ensure that the equipment purchased would be delivered on time and complete. This involvement by the customers was becoming more prominent than ever before. The president decided that action was needed to achieve some degree of excellence in project management. The question was what action to take, and when.

Where will the greatest resistance for excellence in project management come from?

The primary obstacle to attaining project management excellence at Macon will be its entrenched departmental divisions. Historically, isolated departments and protective line managers have propagated a culture where departments are more in competition with each other than in collaboration. This internal rivalry, coupled with a blame culture, significantly hinders synergy. The service department and engineering frequently point fingers at each other, leading to further divisions. Moreover, there’s a notable disconnect between departments, exemplified by the engineering team’s lack of hands-on involvement in the production process and the subsequent undocumented design modifications. Compounding this issue is the consistent leadership perspective: roles like the vice president for engineering have predominantly been filled by those with a mechanical background, potentially making them resistant to change if they perceive their traditional methods as being under threat. Given that Macon has been operational for 50 years, noticeable hesitancy to modify existing practices. Many might feel that if the old ways have endured for decades, they shouldn’t be altered. Additionally, the company’s tendency to rely on intuition, or “gut feel”, over quantitative data for project decisions underscores an inclination for seasoned methods over evolving, mature processes. To truly evolve, Macon’s leadership must demonstrate unwavering commitment, invest in employee training, emphasize the importance of inter-departmental collaboration, and champion open communication and continuous improvement.

What plan should be developed for achieving excellence in project management?

To attain excellence in project management at Macon, a diverse strategy is essential. This strategy must tackle the company’s cultural dynamics, internal rivalry, communication deficits, and the shortcomings in processes and protocols. Here is a comprehensive plan for Macon:

  1. Change management and organizational culture:
    • Top-Down approach: The president should lead the change by setting the vision, mission, and values focusing on collaboration and teamwork.
    • Training and workshops: Hold regular workshops on the importance of cross-functional teamwork, communication, and the principles of project management.
    • Reward collaboration: Introduce incentives and rewards for collaborative projects and penalize finger-pointing and blame games.
  2. Cross-Functional team building:
    • Create cross-functional teams: Instead of segregating mechanical and electrical engineering, create teams with members from both backgrounds for projects. This can improve communication and understanding.
    • Foster inter-departmental relationships: Organize team-building activities between departments. Encourage the sharing of knowledge and expertise.
  3. Redefine the Project Management process:
    • Adopt a standard Project Management framework: Implement frameworks such as PRINCE2, which can offer structured guidance.
    • Scope management: Clearly define project scopes and ensure that changes to the scope are meticulously documented and approved.
    • Quantitative estimates: Replace “gut-feel” decision-making with data-driven techniques such as PERT, or other quantitative methods.
    • Stakeholder engagement: Identify all stakeholders and involve them from the beginning. This includes production, customer service, and external clients. Create a feedback loop so concerns are addressed in real-time.
  4. Improve communication:
    • Establish clear communication channels: Decide on standard methods of communication, meeting frequencies, and reporting structures.
    • Documentation: Documentation should be treated as dynamic. Changes made by production or any other department should be documented and validated.
  5. Feedback and continuous improvement:
    • Feedback mechanism: Create a mechanism where every department can give feedback without fear of retribution.
    • Regular reviews: Periodic reviews of projects to identify gaps, learn from mistakes, and implement best practices in the next project.
  6. Customer relationship and engagement:
    • Involve customers: Instead of having customers appoint “watchdogs,” proactively engage them through regular updates, meetings, and reviews.
    • Customer feedback: Create channels where customers can give feedback and feel heard.
  7. Resource and training:
    • Project Management Office (PMO): Consider setting up a PMO to oversee all projects, standardize processes, and offer training.
    • Training: Provide employees with training on the chosen project management framework and tools.
  8. Tools and software:
    • Implement Project Management tools: Tools like MS Project, Trello, or JIRA can assist in tracking, monitoring, and reporting on projects.
  9. Accountability:
    • Performance metrics: Define KPIs for projects to measure their success objectively.
    • Regular audits: Audits can ensure projects are on the right track and identify potential risks or delays early on.
  10. Leadership and sponsorship:
    • Strong project manager: Appoint strong project managers who can handle the complexities of the project, manage scope, and lead cross-functional teams.
    • Active sponsorship: Ensure that all projects have active sponsors who provide guidance, resources, and support.

For Macon, the journey to project management excellence will be challenging, but by acknowledging the problems and actively working towards solutions, it can rebuild its reputation and deliver consistent results.

How long will it take to achieve some degree of excellence?

Here’s an example timeframe and recommendations on actions to take:

Immediate actions:

  • Conduct initial workshops and training to communicate the new vision.
  • Form cross-functional teams.
  • Set up clear communication channels and immediate feedback systems.
  • Engage and map stakeholders.
  • Implement immediate process improvements and update documentation.

Short-term goals:

  • Adopt and standardize a chosen project management framework.
  • Introduce project management tools and software for tracking and reporting.
  • Monitor projects using the new framework, gathering feedback and refining the approach.
  • Enhance customer relationships through transparency and regular communication.

Medium-term goals:

  • Ensure organization-wide adoption of the project management framework.
  • Initiate regular process reviews, making necessary adjustments based on feedback.
  • Conduct internal audits and compare against industry benchmarks.
  • Define and monitor performance metrics for projects.
  • Expand PMO functions and increase training initiatives for employees.
  • Foster a culture that values collaboration, feedback, and continuous improvement.

Long-term goals:

  • Establish a consistent record of successful project completions.
  • Mature and expand the functions of the PMO.
  • Seek external certifications or recognitions, like PMI’s OPM3.
  • Stay updated with and adopt new project management trends and technologies.
  • Cultivate a self-sustaining culture of excellence, marked by proactive, collaborative, and value-driven approaches to projects.

In the real world, actual timelines may vary based on various factors. However, with dedicated effort, Macon should witness significant improvements in their project outcomes during the medium-term phase. The journey to excellence is continuous, with room for growth even after achieving significant milestones.

Explain the potential risks to Macon if the customer’s experience with project management increases while Macon’s knowledge remains stagnant.

If Macon allows its project management knowledge to stagnate while its customers advance in their project management expertise, it exposes itself to numerous obstacles. Firstly, the company would undoubtedly face a loss of credibility and trust. Customers, equipped with better project management skills, will anticipate high levels of efficiency, accuracy, and consistent project delivery. Falling short in these areas would compromise Macon’s standing in their eyes. Moreover, such customers are inclined to apply rigorous checks, thus intensifying examination on Macon’s work processes. Inconsistencies, inefficiencies, or even slight deviations could be swiftly pinpointed, leading to increased objections or queries.

As a consequence, Macon might see a decline in its business as customers could pivot towards competitors boasting robust project management capabilities. This shift would resonate with their desire to align with suppliers who mirror their own sophisticated methodologies and standards. Additionally, the ripple effects of negative feedback can resonate through the industry, causing reputational damage and potentially deterring new clients or partners from engaging with Macon.

From a financial perspective, project management shortcomings can lead to delays and reworks, both of which can escalate costs. Empowered by their enhanced knowledge, customers are more likely to monitor these inefficiencies closely, making Macon more accountable, which could impact the company’s profitability. Such knowledgeable customers could also craft contracts with strict performance benchmarks, demanding compliance and imposing penalties for any discrepancies or setbacks.

Communication too might suffer. As customers use refined project management terminology and methodologies, gaps could appear in interactions, leading to potential misunderstandings. Moreover, sensing the imbalance in expertise, customers might opt to micromanage or frequently intervene, causing delays and aggravating Macon’s teams. Macon’s refusal to evolve could also blind it to innovations or efficiencies proposed by its advanced customers.

To navigate these challenges, it’s important for Macon to elevate its project management capabilities, align with current industry standards, and foster a culture of continuous learning and adaptation.

This case, and questions, is take from the book “Project Management Case Studies – Sixth Edition” – 2022, by Harold Kerzner.

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