One of the most controllable success factors in project outcome is selection of the leader or manager whether applied to a project or program (where a program comprises multiple projects with a closely aligned set of objectives usually coordinated by a Program Leader or a Program Management Office or PMO).

A recent survey of enterprise IT projects covered 105 projects with an average budget in excess of $1m (median budget of $2m comprising $1m in hardware, software and infrastructure and 7 people for 8 months). The results showed 57% of projects experienced budget overruns, 33% suffered major delays in critical deliverable dates, average budget overrun was 30.5% and shockingly 30% of the projects were terminated completely.

The quality of Project Manager is the most significant influencer on project success.  If the quality of a project manager can have a 50% impact on these problems the median business case associated with project leader selection is $2m average budget x 30.5% average budget overrun x 57% of projects experiencing overrun x a 50% impact through project management quality or $173,800. That is a lot of money and does not account for opportunity costs of projects which cannot be completed due to resources assigned to cover project delays, personnel morale impact driving higher employee turnover, any of the costs of cancelled projects or the loss of revenue and profitability enhancement that arises from failed or delayed customer interaction projects.

The few largest of projects of $30m budgets would indicate a “project leader impact” of $2.6m and the largest $300m+ outsourcing contract “project leader impact” would be $25m. Two of these projects over a 5 year period represents the $50m business case.

It is the same reason why a baseball or a soccer team would “pay” $50m for a great player that can transform their performance (and fan attendance and TV ratings), Virgin Records would sign Mariah Carey for a $100 million five-album contract (not just her revenues but her impact on attracting new artists although Virgin eventually bought out that contract for $28 million after her first album sold poorly), Tom Cruise “banked” over $70m for each of the first three Mission Impossible movies or to be topical why the Denver Broncos signed a $96m 5 year contract with Peyton Manning on the chance he may be fit enough to deliver them to a Superbowl win (one can only imagine the contract value if he hadn’t been injured for most of the past year).

No you aren’t going to be paid $96m or $50m as a Project Manager but by the same token Project Sponsors should understand you get what you pay for. As a business owner or Project Sponsor what are these project stars worth to you?

When Should I Look Outside My Organization And How o I Ensure The Quality Of My Project and Program Management Professionals

Firstly ask yourself what the nature of the project is and whether you have the talent on staff to execute. You don’t want to keep Peyton around on that $19.2m annual paycheck ($52,602 a day on a 365 day year, not bad !) if you aren’t going to use him (note the Broncos are rebuilding key parts of their team following the Peyton announcement to ensure they get a return on their investment).

So if there is something special about the project that you aren’t repeating often or you don’t have the capability or capacity on staff (can anyone spell recession driven downsizing!) then maybe you should look outside for help. Some examples are if you only do one $5m project every 3 years, a merger/acquisition when you are not a serial acquirer, replacement of a core part of your applications or infrastructure that only happens every 5-10 years such as replacing your workforce optimization applications in a contact center or if there is some special skill you need (package implementation leadership like Salesforce.com or a multichannel interaction application.  While bringing in outside leadership you probably want to populate the team with some internal employees to accept responsibility for the results over time and even take over project leadership through a Lead –  Shadow – Follow process.  But make sure you aren’t paying to cross train a person whose only outlet for their excitement and newly acquired talents is to join a consulting company or hang out their own independent “shingle” at project conclusion.

For the most critical projects great project leadership is the only acceptable kind. Training and industry certifications are an important element in recognizing strong Project Leadership. The leader in training and certifications is the Project Management Institute (PMI), launched in 1984, the largest project management association in the world with over 400,000 credentialed PMP’s (Project Management Professionals – the global industry standard certification for Project Managers) and a growing group of PgMP’s (the relatively new Program Management Professional certification), check them out at www.pmi.org

However ongoing research has demonstrated that while PMP or PgMP training or certification may prove technique this is often mostly “book smarts”.  World class project execution comes through hands on experience and intuitive talent.  Intuitive abilities and passion mark the most successful Project Managers. Customer Results has identified the following ten criteria that are most often critical success factors which may or may not be covered by PMP certification or a long resume:

1. Do they have the formal training, background and certifications or do their abilities and experience overcome the lack of formal certification?
2. What is their ability in multilevel communications covering executive, manager, business, IT, vendor/supplier, and finance team members?
3. Are they passionate enough and emotionally strong  enough to succeed against the organizational, political and technical obstacles that will stand in their way?
4. Do they have a logical, analytic, systems approach to solving problems, especially in ambiguous environments?
5. Do they have the conceptual ability to grasp and summarize the solution complexity?
6. What is their approach and attitude to identifying and mitigating risks?
7. Are they nimble enough to respond to the challenges ahead (it is especially true that experienced professionals who have exclusively worked within large “brand” services companies (IBM, DT etc) have never been asked to be nimble without the power political support of their employers and fail in more independent opportunities, some of these people of course succeed)
8. What is their ability to create and evolve change management plans throughout the project?
9. What is their experience in  vendor and partner leadership and management?
10. What is their prior experience, both success and failure, and have they learned?

Four Models That Are Changing The World Of Project Leader Compensation

Well no matter how important the project or impressive the project leader no-one is paying you $19.2m a year as a project manager (or $52,602 a day as Peyton is being paid) although if anyone knows of such a requirement please contact us immediately with a small deposit check and we will be on the first plane .. in fact we will come along for 50% of that, or just $26,300 a day .. and only charge you that Monday to Friday, what a bargain .. we dream !

However we are seeing some trends start to emerge that are changing the world of project manager contracts and compensation which are not totally dissimilar to the stars in movies, music, soccer, baseball, basketball and the NFL. These are less frequent in employee based models and less frequent in relationships with the biggest solutions companies like Accenture and IBM but are starting to come up in the boutique project and solutions and independent world in which we exist and we are in discussions on them all:

• Business Case Performance Related Compensation – Just like Tom Cruise was rumored to have given up his upfront fees for Mission Impossible 4 in return for a “percentage of the receipts” the best contract project managers are often foregoing parts of their hourly fees in return for milestone or even budget compensation.  The most extreme version of this we have seen recently was a 50% reduction in normal contract fee rates for a 20% share of budget benefits in the first two years following project completion.

• Milestone Based Or Customer Satisfaction Based Performance Compensation –Reductions in hourly fee rates or bonuses associated with milestone achievement or even sponsor or end customer satisfaction conditions.

• Product Provider Contribution And Services Subsidy – We are in the middle of a discussion where our client is looking for independent project management (aka us at Customer Results), has been engaged directly with  two technology provider account teams to provide a platform but has asked the technology vendors to provide some kind of cost share or incentive compensation to us as a way of lowering the clients’ “services bill”. The Client VP is an ex technology solution provider executive and says she knows the vendors have “partner budget” in their business model which they aren’t using because the contract is direct and there is no partner involved. This is definitely new and different. The providers internal professional services personnel are 40% more expensive than us and the difference will be more than 50% if the client secures the subsidy. The subsidy is paid direct to Customer Results even thought we are contracted to the customer and not the technology solution provider, strange but true.

• Product Vendor Financed – We are seeing a growing number of the largest technology providers offering financing models to their clients. Especially in this world of constrained bank lending this is often the best “deal” available. Lately we have started to see these financing deals include non provider professional services. It is an interesting dynamic because our performance payments and commitments often move from the end client to the provider.

Customer Results’ Passionate Obsession About Project Leadership Talent And Our Profile For Cost Effective, World Class Project Leaders

Because Customer Results is obsessively committed to positive outcomes and results for our clients we are very focused on project leadership.  We provide project leaders and leadership teams for our turnkey projects but also for clients on a staff augmentation basis. The foundation of our passion for project and program management is our founder, Graham Clark (and we have over 30 similar resources available to our clients). You can use his profile as an example of what you should be looking for when seeking the best in project leadership:

• Started his IT career in 1984 as one of the earliest authors of Project and Program Management and formal IT methods working with the UK Govt CCTA OGC group developed the earliest versions of what became ITIL and the PRINCE project management methods that underpin PMI’s PMP methodologies.
• 27 years of hands on experience including 11 years of foundational “premier brand” Consulting experience at CGEY, 4 years as a program level executive at a Fortune 500 company driving transformational technology based initiatives and 14 years as an independent consultant and boutique solutions consulting and systems integration leader.
• Project and program leadership in Europe, Americas and Asia including multinational, global technology transformational project budgets up to $200m+ and 700+ personnel and $500m+ outsourcing relationships.
• PMP certification in 2001 (certificate #374740)
• Broad industry experience including HiTech / Communications / Media, Travel & Transportation, Financial Services, Insurance, Healthcare/Pharma/Life Sciences, Government, Utilities and Retail & Distribution.
• Broad experience but specialty in customer interaction related situations including sales and service comprising contact center, field, branch/store, channel partner, ecommerce, instant messaging, email and recently social media channels.
• A passion for benefits strategy and realization, analytics and the flexible application of formal methods and approaches.
• A range of situational leadership including small entrepreneurial startups, large national and international corporations and in project rescue, turnaround, M&A and other challenging situations.
• Experience as a business and technology executive and a unique ability to create alignment across those different constituencies and with external technology and solution vendors.
• Experience in installed / insource, outsource, offshore, nearshore, BPO, ITO, Cloud, SaaS and most other business models.
• Passion for benefits clarification, ROI, IRR and other returns models and benefits realization tracking.
• A believe in end to end quality and dedication to quality solution production based on formal SQA (Software Quality Assurance) and IQA (Infrastructure Quality Assurance) quality and testing processes. Includes formal quality programs such as experience in operating in and implementing formal quality programs including Baldridge, ISO9000, ITIL, CMM and Six Sigma.
• Experience with requirements and usability definition and test case / use case compliance definition and approval, test execution leadership, performance and compliance verification and approvals within the development environment and across multiple constituencies. Includes white box and black box testing approaches, regression and even destructive testing within SDLC and Agile methodology environment and a unique additional focus on infrastructure assurance, an increasingly important component of applications in an internet and mobile enabled world.
• Self motivated with a high-energy leadership style integrating vision, objective based performance management and personnel development including deep experience as an executive communicator and public speaker.
• Education:   BSc Hons Applied Computer Systems (A combined Bus Mgmt and Applied IT degree), Brunel University, London, England.