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Stakeholder Management

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


We are working through a series of blogs, looking at some of the essential models that a project manager will need. We will cover:

 

The Stakeholder Management Process

Stakeholder management starts during scoping, to understand their varying needs and wants, and negotiate with them  to balance stakeholders’ long shopping lists with your constrained resources. In the planning stage, you need to figure out how to win over – or at least pacify – the doubters and keep your supporters happy, so that throughout this stage and the implementation stage, you can engage with your stakeholders actively. In the evaluation stage you will need their perceptions if you want to create a full assessment of your project.

The broad process for managing stakeholders has four steps.

Stakeholder Management Process

Stakeholder Plan

Build your plan for each stakeholder, based on your assessment of:

  • what they want from you
  • what you want from them
  • what level of influence and power they have
  • how supportive or sceptical they are
  • … and any other factors

Your plan should contain:

  • The messages you want to communicate
  • The means by which you plan to communicate them
  • What attitude to take (for example: consultative, informing, instructing, requesting…)
  • The best time to deliver each message
  • Who will be responsible for preparing and delivering each message
  • How you will test whether the message has gone down as you intended
  • How you will gather feedback from the stakeholder

Stakeholders are vital to your project. It is they, after all, who will pass the final verdict on whether it has a success…

or a failure.

Further Reading

From the Management Pocketbooks series:

  1. Project Management Pocketbook
  2. The Influencing Pocketbook
  3. Handling Resistance Pocketbook
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The Triple Constraint

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


We are working through a series of blogs, looking at some of the essential models that a project manager will need. We have covered:

  • The Project Lifecycle
  • The Triple Constraint (here) – and in future blogs we will look at:
  • Stakeholder Management
  • The Critical Path
  • The Gantt Chart
  • Risk Management

Defining a Project

We define a project in terms of its purpose, goal, objectives and scope.

  • Purpose: why we need it
  • Goal: what it needs to achieve
  • Objectives: the constraints we must meet
  • Scope: The breadth and depth of the work to be done

Objectives come in Three Flavours

Objectives set constraints we must meet: time, cost and quality parameters that define our priorities. Once all of these are fixed, we can think of them as occupying three corners of a rigid triangle: the time-cost-quality triangle.

The Triple Constraint - The Time-Cost-Quality Triangle - The Iron Triangle - The Triangle of Balance

This is also known by other names, the most useful of which is the Triple Constraint. Because once you have a plan, any attempt to change one corner…

  • to reduce the cost
  • to speed up delivery
  • to improve performance

… will only be possible if you are prepared to compromise one or both of the other two corners.

The important thing about the Triple Constraint is that it never tells you what to do – your primary and secondary time, cost or quality objectives must be your guides. But it will always show you clearly what your choices are.

An example…

You want your IT system to produce management data more quickly than it is specified to? Well that is okay. It can, as long as you are prepared to either:

  • Compromise on budget, spending more on the system and on the people and systems that feed it with data  –  or
  • Compromise on performance and accept either a reduced data set focused on the most important figures, or reduced data quality, giving first estimates only, based on the most material information, but awaiting the precision of the full information.

This is just an illustration, but it shows clearly how the Triple Constraint offers us options.

Further Reading

From the Management Pocketbooks series:

  1. Project Management Pocketbook
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Project Lifecycle

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course. This is our last blog before Christmas so may we wish everyone a happy and safe holiday and we’ll be back in 2022.


Implementing business strategy usually means starting one or more projects. Whilst nothing would please me more (as a former professional project manager) than to devote a series of blogs to a thorough description of project management, that is not the role of these blogs and also, The Project Management Pocketbook already covers that ground.

So I shall limit myself, in the next few blogs, to some of the essential models that a project manager will need. We will cover:

  • The Project Lifecycle (here), and in future weeks
  • The Triple Constraint
  • Stakeholder Management
  • The Critical Path
  • The Gantt Chart
  • Risk Management

 

Four Stage Project

There are as many ways of representing the lifecycle of a project as project managers, but they all contain many of the same features, just different language for the stages, different choices of how detailed to be, and different graphical metaphors for how to draw it.

Here, we will use the version in the Project Management Pocketbook.

Project Lifecycle

Scoping

Define the purpose, aim, objectives and scope of the project to evaluate whether it makes good business sense and is therefore worth proceeding to the planning stage. Good business sense here means consistency with your organisation’s mission, vision and values, and a reasonable expectation that the benefits will exceed the costs.

Planning

Put together a detailed specification for what your project will produce and then use this as the basis to plan what you need to do, in what order, at what time, with what resources and allocating work to which people. Calculate the cost of your plan to create a budget and compare that with the benefits you will get if your project delivers to its specification and you can create a business case. You business case will guide your decision whether to invest in implementing your project.

Implementing

Now deliver your project, constantly monitoring for risks, changes, delays, overspends and the quality of your delivered products. Intervene where necessary to maintain control. At the end of the implementing stage, you can hand over the last of the things you have created to your customer, boss or client. Will they accept them? Only if they are fit for purpose.

Evaluating

How did it go? What did you learn? How did team members perform? Was it all worthwhile? Take this new knowledge into your next project and do that one even better.

Further Reading

From the Management Pocketbooks series:

  1. Project Management Pocketbook
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Mission, Vision and Values

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Among the most frequent sources of confusion for managers – at all levels – are the distinctions between mission, vision and values.

As I started planning this article, I created a table for myself, to put my ideas down about how they compare. In the end, I decided that, if a picture is worth a thousand words, a table must be worth at least 500.

You can click on this image to get a full screen version of this table.

Mission, Vision, and Values

There is not much more to say

Your mission is a long-term definition of why you are in business, your vision sets out what you want to achieve within your strategic planning timescale, and your values determine the culture, behaviours and choices you want your business and its people to follow.

Values should drive your culture through every process: recruitment, appraisal, promotion, succession, procurement, development, sales, marketing, …

Mission should set up the basis for your values. Mission and values should help you find which of many possible visions is right for your business.

Mission, vision and values: one of those things that is fiendishly simple in concept, yet staggeringly hard to do well.

Further Reading

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Business Strategy Tools

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Over the years, Pocketblog has covered some important business strategy thinkers, so we will start by reviewing what we have.

Good Strategy/Bad Strategy

This is the name of Richard Rumelt’s book and it neatly frames any discussion of business strategy by defining what your outcome needs to look like. Take a look at ‘What makes good business strategy?

The Balanced Scorecard

In one of the all-time classic Harvard Business Review articles, Robert Kaplan and David Norton set out to ensure that our business strategies are balanced across a range of different areas of the business. The tool they introduced is nearly ubiquitous in the upper reaches of the management world, and no manager can get away without at least a passing familiarity with the Balanced Scorecard. Take a look at ’Balance is Everything’.

The McKinsey 7S Model

One of my own favourite tools is also about balance, but this time about ensuring all the elements of your business strategy and planning are all aligned. It was developed by consultants at top US firm, McKinsey: Tom Peters and Robert Waterman. The seven S model reminds us that shared values, style, skills, staff, structure, systems, and strategy must all be consistent with one another. Take a look at ‘On Competition: Internal Forces and the 7-S Model’.

The Awesome Michael Porter

Over the years, three blogs have featured the thinking of business strategy specialist, Michael Porter.

‘On Competition: Five Forces’ briefly introduced two of his principal ideas: the five forces model and his three generic business strategies that flow from them.

‘On Competition, again: Porter’s Five Forces’ took a deeper look at the five forces model.

‘On Competition – The Far End of the Value Chain’ focused on the three generic business strategies and his concept of the value chain. Here, I speculated that some businesses have found a fourth, very successful business strategy.

By the way, a recent entry in the Pocketblog Correspondence course returned to the idea of the value chain. Take a look at ‘The Value Chain’.

The Boston Consulting Group Matrix

Having finished reviewing the archives, let’s take a look at one business strategy tool. This is designed to help us answer a very simple question:

‘We have a number of products (or services) but limited resources to invest in their development and marketing. Which products (or services) should we focus our investment on?’

The folk at Boston Consulting Group who developed the tool suggested that two considerations are paramount in making our judgements:

  1. What is our market share?
    Do we have a dominant market position with this product/service, or a modest share. This dictates the base from which investment can grow or maintain our position.
  2. What is the growth potential of the market?
    Is this product in a growing, static or declining market? Clearly static and declining markets offer far less opportunity to recoup investments.

The result was a simple matrix that plots these two conditions against one-another and identifies four generic strategies. You can click on the image to enlarge it.

The Boston Consulting Group (BCG) Business Strategy Matrix

The Matrix gives us four strategies, three compelling labels for our products/services and one label that is, frankly, honest but lame.

Stars

Place your biggest investment bets on the products which dominate markets with high growth potential. If you are Samsung, you will be investing highly in mobile telephone products because the market continues to expand and you already have a dominant position.

Dogs

Do not invest – arguably, disinvest – in products which have a small share of a static or declining market. There is not much to win and you are not placed to take much of it.

Cash Cows

What do you do if you are a dominant player in a static or declining market? BCG suggested it is like having invested in a cow: you should look after it and milk it while it is healthy. This is how I read the men’s razor market. If you are one of the big players in your region (Gillette, Wilkinson Sword, Bic, for example, here in the UK), then you have a lot of investment in products and marketing, and a strong, valuable revenue stream. Over investment can gain little, as the market will never expand until men grow two heads or we need to shave more of ourselves. But if you don’t invest, you will lose the benefit of your position to your rivals. So, what do we see? Incremental investment in new – but hardly innovative – products. When I started shaving, two blades was new. Now we are up to five. By the time I no longer need to shave (about thirty years or so, I guess) I predict an eight bladed razor will be common.

Question Marks

What to call these pesky products… Does the label attach to the products or the challenge BCG found in labelling them with a cute title? Set aside that curious linguistic conundrum and we face the most difficult challenge of all. Your market is growing, so there is a big prize for the skilled/lucky investor. But your market position is weak, so you have a low chance of success against bigger rival products. Like many good tools, the BCG matrix does not give you all the answers. But it does bring your choices into stark relief.

Further Reading

From the Management Pocketbooks series:

  1. The Strategy Pocketbook
  2. Business Planning Pocketbook
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SWOT, PESTLE and Waterfall Analysis

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


I used to be a director in a business where, like many businesses, once a year we would have a ‘strategy meeting’ to look at our strategy for the next year. How could we understand the market and what could we do to improve our competitive position. In the next blog, we will look at some of the more sophisticated strategy planning tools available to you. Here, I want to focus on three that have the overwhelming merit of simplicity.

Every year we would follow the same process… until, that is, until I got heartily sick of it and introduced another. But let’s start with the two tools that made up that much used process, before I offer you a powerful alternative that is guaranteed to give you insights into how your business can make more money.

SWOT Analysis

Perhaps the best known strategic analysis tool is SWOT Analysis – a structured review of your organisation’s Strengths, Weaknesses, Opportunities and Threats – often presented as a grid like this:

SWOT Analysis

The secret to making SWOT Analysis work is frankness and a determination to be really objective about how your organisation measures up to the market. Being good at something is not a competitive strength if your competitors are also good at it – or even better.

The hardest part is to understand what is coming over the horizon by way of threats and opportunities. Because it is when you pair up the top of the chart with the bottom that you start to see what strategic changes you need to make. So, how do you spot opportunities and threats?

PESTLE Analysis

Of all the tools for horizon scanning, PESTLE analysis is the simplest. We just take stock of all of the changes we can foresee under a range of headings:

 

PESTLE Analysis

Waterfall Analysis

When you get bored with these, focus on revenue. Waterfall Analysis splits your entire market into your market share and the market share you leak to your competitors. It further subdivides these to give five components and hence five parts to your strategy. It will not give you the answers, but it will focus your thinking. People who have used this for a first time often find it leads to revelatory ‘aha moments’; so why not give it a try?

Click on the figure to enlarge it

Waterfall Analysis

Further Reading

From the Management Pocketbooks series:

  1. The Strategy Pocketbook
  2. Business Planning Pocketbook

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Process Map

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


If you want to understand your value chain, with the intention of improving it, perhaps, you need first to be able to visualise it. You can do this by preparing a ‘process map’.

The purpose of this blog is to introduce you to two widely used methodologies for mapping out and illustrating processes.

The Role-Activity Diagram (RAD)

Role activity diagrams are based on three concepts:

  1. The roles that people, teams or departments play in the process
  2. The activities that players fulfil during the process
  3. The interaction between one activity and another

The RAD below illustrates the process for a manager writing a marketing article on behalf of their organisation, for a trade journal. You can click on the image to see a larger version.

Role-Activity Diagram

The symbols on the chart are explained below.

Role-Activity Diagram Symbols

Roles include individuals, positions or posts, jobs, teams, departments, companies, organisations like regulators or unions, or a class of stakeholder like customers or residents. Activities tend to create change, like making, checking, briefing or selling. The interactions can be anything that involves two or more roles, such as moving materials or information, allocating or delegating work, authorising or agreeing a decision, or reporting status.

The IDEF Method

IDEF stands for ‘Integrated definition method for function modelling’. It presents processes as flow diagrams with activities as boxes, using a standard set of directions. The process flows from left to right with:

Inputs
… shown coming from the left
These can be materials, ideas, information or services that input into the process

Outputs
… shown coming out from the right
These can be information, services or products that are produced by the process

Controls
… shown applied from the top
These are the decisions and information that control the process

Mechanisms
… shown applied from below
This can be a person, team, system, service or supplier that performs or assists in the process

IDEF0

Strictly speaking, this is one of a family of IDEF modelling tools; IDEF0. You can learn more about IDEF1, IDEF1X, IDEF3, IDEF4 and IDEF5 at the IDEF website. These (and other) IDEF tools form a large family (Wikipedia lists 15) of systems and software modelling languages.

IDEF0, however, is very suitable of modelling organisational processes and has the merit that it can translate well into setting out a functional requirement for a system development.

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Lean Thinking

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Imagine that you were an Egyptian overseer, responsible for building a great pyramid for your Pharaoh. How would you want to organise things?

  • Would you want to start by knowing exactly what your Pharaoh wants?
  • Would you want to fully understand every part of the process?
  • Would you want to understand how stone moves from being part of the wall of a quarry to a perfectly fitting part of your Pharaoh’s pyramid?
  • Would you want to ensure that the giant blocks of stone arrived fast enough so the workers on the ramp always had a stone ready to move up?
  • Would you want to make sure stones got up to the top of the ramp fast enough to make sure that they were there as soon as the last stone was placed on the pyramid?
  • Would you want to avoid stones arriving too fast and causing a bottleneck?
  • Would you want to make sure every stone was perfect to avoid having to stop and find a replacement or re-dress the stone on site?

If your answer is yes to all of those questions, then congratulations: you are instinctively an ancient Lean Manager.

Lean thinking is not new: the ideas have been around for a very long time and accumulated in industry over the years. But there are a few names that are strongly associated with its emergence as a driving force in organisational effectiveness in the last years of the twentieth and early years of the twenty first century.

The thinking was done by the founder of Toyota, Sakichi Toyoda, his son, Kiichiro Toyoda, and their postWW2 production chief, Taiichi Ohno. The Toyodas set out how a production line could work best, avoiding the problems of Henry Ford’s original ‘don’t stop the flow of the line if anything goes wrong – sort it out at the end’ approach. When they could not make it work due to the flaws in their supply chain, it was Ohno who then solved the practical problems.

The message came out in a landmark study by researchers from The Massachusetts Institute of Technology (MIT). This was published in the 1991 book ‘The Machine that Changed the World’ which introduced the world to the term ‘Lean’. Two of its authors: James Womack and Daniel Jones, went on to write a series of influential books, spelling out how to apply the lean principles they had researched at Toyota, starting with ‘Lean Thinking’ and becoming even more practical, with ‘Lean Solutions’.

The Value Chain

At the heart of Lean Thinking is an understanding of the value chain, which we discussed in an earlier post. Lean thinking starts by defining value from the point of view of the end customer for your products or services. When you do this, you usually find that only a small proportion of your activities directly contribute to that value (from the customer’s perspective). The rest – including some parts of what Michael Porter described as Primary Business Activities are only necessary as supporting this value creation.

Performance improvement comes first from eliminating steps and interactions that are not necessary for value creation and then, redesigning those that are to be as effective and efficient as possible. This means less wastage due to delays, re-work, duplication, scrapping below quality products, and oversupply.

The five principles of Lean Thinking are set out below.

The Five Principles of Lean Thinking

Waste

At various points, Lean Thinking decries wastage. The Toyota production chief set out seven sources of waste that destroy value.

  1. overproduction
  2. excessive inventory
  3. defects
  4. delays
  5. unnecessary transportation of goods
  6. unnecessary movement of materials
  7. unnecessary processing or materials

Where is there waste in your organisation?

Further Reading

In 1997, James Womack founded the Lean Enterprise Institute. Its website is a valuable source of resources for understanding more about Lean thinking.

In our Management Thinkers series, you may like Taiichi Ohno: Lean Production.

From the Management Pocketbooks series:

  1. Improving Efficiency Pocketbook
  2. Improving Profitability Pocketbook
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How To Get Purchasing Right

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Procurement is a deep skill, with its own professional membership bodies around the globe:  the Chartered Institute of Purchasing and Supply in the UK. Yet small organisations rarely have the scale to justify a full-time qualified professional purchasing manager.

This means that all managers working within a supply chain need to be able to turn their hand to the craft of buying – and to be able to do it well enough to secure the right materials, assets or services, at competitive rates.

Another reason for needing a good basic understanding of procurement is because, if your organisation does have a professional purchasing team, their interests and yours may not always, on the surface, overlap completely.  Understanding how this is so, and what pressures they are under, will help you to negotiate  with them and influence the selection process. Often, in setting good practices, purchasing managers create ample flexibility. Your job is then to establish where it is and learn how to exploit it to the good of your organisation. The confrontational approach that many managers adopt with central functions will rarely achieve the results you need.

So what is it that Procurement Professionals know?

Professionals follow a simple purchasing cycle.

Procurement Process

What makes the cycle work well is the understanding that blindly following the process can produce unintended results. Each organisation will optimise the details of their process for certain factors, like price, speed, reliability or accountability. Adaptability is the key to getting it right in every case. Here are some tips for a strong underpinning to your process.

1: Cost and value are not the same thing. If you focus only on cost, you rarely achieve value.

2: If you do not specify what really matters, the negotiation process will optimise for cost and deliver the wrong result. Ensure you understand the functional and logistic requirements of the department or team on whose behalf you are procuring the goods or services. Use your expertise to adapt the process appropriately, to balance consistency and transparency against the genuine variability in requirements across a complex business.

3: Over-focus on cost comes with a price: ‘you get what you pay for’ as my dad used to say.

4: A paper and data based evaluation of your supplier is valuable, but if you are going to depend on that supplier, quality accreditation and balance sheets are not enough: you need to speak to other customers and visit the supplier’s site to meet the people you will rely upon.

5: Regular reviews are important to ensure that they are maintaining the quality and service standards that led you to select them at the start of your relationship.

6: The right balance of competitive market testing and long-term relationship building will yield the best results. If you commit to a supplier for too long, without subjecting their prices and services to competition, they may become complacent, but if you try to re-tender your contracts too frequently, suppliers will have little reason to be loyal to you, knowing that an opportunist competitor could offer a lower price in a year or two.

7: Everything is negotiable, but if you take a stance that is too aggressive, your supplier may need to make hidden compromises to maintain their profitability. Those could harm you in the long run.

8: Once you have built a relationship, it is tempting to relax and turn your focus elsewhere. Continue to invest in the relationship with frequent communication, regular meetings and constant research into new developments in the trade, from things like trade shows, conferences and trade journals. Discuss new developments with your supplier and gauge their levels of investment in new ideas and technologies.

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The Value Chain

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


The Value Chain is the complete set of processes that links everything an organisation does. Let us say you make widgets. The value chain starts with the process of sourcing raw materials, which you then purchase from a supplier, who then delivers them to you, which you process into finished widgets, that you market and sell, after which you deliver them to your customers, who incorporate your widgets into their value chain.

Most often, the value chain is represented as links in a single chain. I think that this is unrealistic. Instead, it is better to think of it as links in multiple chains, all joined up…

Value Chain

Understanding the value chain is essential for any manager who wants to step beyond their parochial role within it. Understanding and analysing your value chain will allow you to:

  • spot opportunities to create efficiencies within your part of the value chain
  • improve hand-offs with other parts of the value chain
  • appreciate the full strategic scope of the value chain and where you fit into it
  • determine where most and least value  is added and review how to improve the value to cost ratio
  • find where your competitive advantages lie
  • benchmark your performance against industry norms and best practices

Michael Porter distinguished primary business activities (the value generating activities described in the value chain) from secondary business activities, which are necessary in supporting the primary activities. These include:

  • technology and systems infrastructure implementation and maintenance
  • personnel and human resource management, including recruitment, development, appraisal, remuneration, succession, discipline
  • financial planning and management

We can view these as further side links to the value chain.

Porter was clear that a successful business must ensure that all links between elements of this full value chain are strong, if it is to thrive under the pressures of competition.

Further Reading

Two previous Pocketblogs will add to your understanding of the Value Chain:

  1. On Competition: Internal Forces and the 7-S Model
  2. On Competition – The Far End of the Value Chain

You may also like The Strategy Pocketbook

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