In the past, there has not been enough emphasis on project management. At one time, Apache even assigned trainees to perform project coordination. All failed miserably. At one point, sales dropped to an all-time low, and cost overruns averaged 20– 25 percent per production line.
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Apache Metals is an original equipment manufacturer of metal working equipment. The majority of Apache’s business is as a supplier to the automotive, appliance, and building products industries. Each production line is custom designed according to application, industry, and customer requirements. Project managers are assigned to each purchase order only after the sales department has a signed contract. The project managers can come from anywhere within the company. Basically, anyone can be assigned as a project manager. The assigned project manger can be responsible for as many as ten purchase orders at one time. In the past, there has not been enough emphasis on project management. At one time, Apache even assigned trainees to perform project coordination. All failed miserably. At one point, sales dropped to an all-time low, and cost overruns averaged 20– 25 percent per production line. In January 2007, the board of directors appointed a new senior management team that would drive the organization to excellence in project management. Project managers were added through recruitment efforts and a close examination of existing personnel. Emphasis was on individuals with good people and communication skills. The following steps were implemented to improve the quality and effectiveness of the project management system:
- Outside formal training for project managers.
- Development of an apprenticeship program for future project managers.
- Modification of the current methodology to put the project manager at the focal point.
- Involvement of project managers to a greater extent with the customer.
What problems can you see in the way project managers were assigned in the past?
In the past, Apache Metals had several notable issues with the way they assigned project managers. First and foremost, the assignment was reactionary, happening only after the sales department secured a contract. This approach often meant that the selection wasn’t based on strategic alignment or specialization, but rather on immediate availability. Moreover, these project managers could come from any part of the company, raising concerns about their potential lack of expertise or training specific to the project at hand. This non-specialized approach was further intensified by the fact that the project manager could be responsible for as many as ten purchase orders simultaneously, risking oversight and attention to each project’s unique needs.
Perhaps one of the greatest issues was Apache’s decision at one point to assign trainees for project coordination. While it’s crucial to provide learning opportunities for newcomers, entrusting trainees with such significant responsibilities without adequate supervision can jeopardize project outcomes. Furthermore, the overall lack of emphasis on project management became evident when observing the frequent cost overruns, which averaged between 20-25% percent per production line. Such overruns often suggest underlying issues with planning and execution.
Additionally, the practice of waiting to assign project managers until after contract finalization meant that the approach was more reactive than proactive, giving project managers less time for strategic planning and alignment with the project’s objectives. Finally, the limited involvement of project managers with customers in the initial stages likely hindered proper communication, making it challenging to fully grasp customer expectations and requirements. All these issues combined made it clear that Apache Metals’ previous approach to project management was random and lacked the necessary structure and focus on critical skills and training. The changes later implemented by the new senior management team were essential to address these foundational problems.
Will the new approach taken in 2007 put the company on a path to excellence in project management?
The new approach by Apache Metals in 2007 shows significant promise in steering the company towards excellence in project management. One of the primary downfalls in their past approach was the lack of experienced personnel in important roles. The decision to invest in outside formal training for project managers is a strategic move. This ensures that project managers are equipped with the necessary tools, techniques, and best practices in the realm of project management.
Moreover, the introduction of an apprenticeship program underscores a commitment to long-term excellence. It not only guarantees a continuous supply of capable project managers but also ensures these individuals are in tune with the company’s operations and the specific challenges of the industry.
Furthermore, enhancing the involvement of project managers with customers can be a game-changer. This direct line of communication ensures a clear understanding of customer expectations, leading to better project outcomes and bolstered client satisfaction.
However, the success of these promising steps largely depends on their execution. The quality of training, relevance of the apprenticeship programs, and their alignment with industry best practices are paramount. Equally crucial is the company’s corporate culture. For project management to truly flourish, it needs to be backed by unwavering support from senior management and peers from other departments. Additionally, Apache Metals must adopt a culture of continuous improvement, regularly updating their methodologies and practices to remain at the forefront of project management excellence. Lastly, ensuring adequate resource allocation, both in terms of budget and time, will be essential in realizing the full potential of these reforms.
While Apache Metals’ 2007 strategy sets a robust foundation, its long-term success in achieving project management excellence will be determined by consistent effort, thorough review of practices, and an adaptable approach to evolving industry demands.
What skill set would be ideal for the future project managers at Apache Metals?
The ideal skill set for future project managers at Apache Metals, as well as in any other sector, would include the following:
Technical proficiency: Understand the complexities of metal working equipment, the manufacturing processes, and industry-specific requirements. This ensures credibility with both the team and the client.
Leadership: Since the role requires coordinating with multiple departments and teams, the ability to lead, inspire, and motivate is critical.
Strong communication skills: Effective communication is essential, both internally with team members and externally with clients. This includes listening, speaking, and writing skills.
Customer relationship management: Given the custom nature of the projects and the new focus on greater involvement with the customer, project managers should be skilled at building and maintaining strong client relationships.
Problem solving and decision making: With custom projects, unforeseen challenges can arise. The ability to think on one’s feet, make decisions under pressure, and solve problems effectively is crucial.
Uncertainty management: Recognizing potential risks and opportunities, and proactively addressing them to prevent cost overruns and ensure project success.
Time management and organization: Handling multiple purchase orders requires strong organizational skills and the ability to prioritize tasks and resources effectively.
Budgeting and financial skills: To prevent cost overruns like in the past, future project managers should be skilled in budget management and financial forecasting.
Continuous learning and adaptability: Given the changing nature of industries and technology, project managers should be open to learning and adapting to new methods and tools.
Negotiation skills: There may be times when compromises need to be made either with internal stakeholders or with the client. A good project manager should be skilled in negotiation to reach win-win outcomes.
Stakeholder management: Understanding and balancing the needs and concerns of all stakeholders, from team members to clients to senior management.
Team collaboration: Given that project managers can come from anywhere within the company, the ability to work seamlessly with diverse teams and individuals is paramount.
What overall cultural issues must be considered in striving for excellence in project management?
In striving for excellence in project management at Apache Metals, several cultural issues must be addressed. First and foremost, human beings are inherently resistant to change. The company’s shift towards an enhanced focus on project management might face skepticism, especially from long-standing employees familiar with past practices. Previously, the company had a somewhat ambiguous approach to assigning project leaders, which means there’s a pressing need to ensure clarity in roles and responsibilities to avoid confusion and overlap. Effective project management hinges on clear and consistent communication. Given the past practices at Apache Metals, fostering a culture that emphasizes open channels of communication becomes paramount. This includes ensuring smooth communication flows between different departments, between project managers and their teams, and, crucially, between the company and its customers.
Furthermore, the new initiatives, like outside formal training and apprenticeship programs, will only be fruitful if the company wholeheartedly values continuous learning and professional development. This sentiment should permeate throughout the organization. Equally vital is placing trust in the capabilities of project managers. By positioning them at the focal point of projects, senior management must empower them to make crucial decisions. This trust underscores the importance of a cultural shift towards being customer-centric, where the emphasis isn’t just on meeting requirements but genuinely understanding and anticipating customer needs.
Knowledge sharing becomes another cornerstone. Apache Metals must foster a collaborative environment that breaks down silos and encourages teams to share insights, thus enhancing overall project outcomes. This culture should be coupled with one of accountability. It’s essential to have mechanisms to understand the root causes of issues or budget overruns, learn from these episodes, and steer clear of a blame game. Motivation plays a pivotal role in driving excellence. The company should embed a culture that recognizes and rewards outstanding performance in project management. Lastly, given the unique nature of Apache Metal’s business, where each production line is custom-designed, an adaptable and flexible culture becomes indispensable. This adaptability ensures that the company can meet the diverse and ever-evolving challenges each project presents seamlessly.
In essence, for Apache Metals to truly champion project management, it requires a comprehensive cultural transformation that champions communication, learning, customer focus, collaboration, and accountability.
What time frame would be appropriate to achieve excellence in project management? What assumptions must be made?
Achieving excellence in project management, especially for an organization that has previously faced significant challenges, is a substantial undertaking that requires careful planning, effort, and time. Here are some considerations for determining an appropriate time frame and the assumptions that must be made:
Time Frame:
Initial assessment (1-3 months): Understand the current challenges, review past project failures, and gather feedback from stakeholders. This period also involves benchmarking against industry standards to determine the gaps in the existing system.
Training and development (6-12 months): This includes both the outside formal training for current project managers and the apprenticeship program’s design and implementation for future project managers.
Methodology modification (3-6 months): The time to modify and integrate the current methodology to put the project manager at the focal point will depend on the scale and complexity of the existing processes. It will also involve a phase for feedback and iteration.
Implementation and realignment (6-12 months): This phase is about realigning the organization to the new project management standards, including role definitions, reporting structures, and workflows. Ensuring project managers are more involved with the customer may also require contractual and workflow changes.
Continuous improvement (ongoing): Excellence in project management is not a one-time achievement but a continuous journey. Regular reviews, feedback sessions, and refinements will be necessary.
The organization might need anywhere from 18 to 36 months. However, significant improvements may be observed earlier, depending on the efficiency of the changes implemented.
Assumptions
For Apache Metals to achieve excellence in project management, several key assumptions are made. First and foremost, there is an underlying expectation that there will be consistent and unwavering support from senior management and the board. Such high-level backing is essential, as change initiatives without strong organizational support frequently encounter obstacles and resistance. Additionally, it’s assumed that the company has sufficient financial and human resources to facilitate necessary training, adopt new tools, and modify methodologies. Effective communication is another cornerstone assumption. The organization believes that it can successfully articulate the goals, changes, and the rationale behind them to all relevant stakeholders. This communication is vital, not just for informational purposes, but to secure buy-in and foster understanding across the board. It’s also assumed that there’s an active and open channel for feedback from employees and stakeholders, ensuring the system’s continuous improvement. Lastly, there’s an overarching assumption that the broader business environment in which Apache Metals operates will remain relatively stable. This means no significant disruptions such as economic downturns or global crises that may unexpectedly disrupt or slow down the initiative.
This case, and questions, is take from the book “Project Management Case Studies – Sixth Edition” – 2022, by Harold Kerzner.
