A recent report by the Association of Certified Fraud Examiners (ACFE) determined that the cost of fraud and abuse was $652 billion. In total, fraud was attributed to 5% of total revenue, and in 42% of the cases, nothing was recovered. If a business is losing 5% of total revenue, imagine the impact on the bottom line. The costs of doing business are constantly increasing, which means you need every single penny to meet your financial obligations.
Author: Dr. Flores Page 26 of 44
As we grow up, our parents teach us to take the “high road” and skirt problems. In How to Win Friends and Influence People, Dale Carnegie says the best way to solve problems is to avoid them. The advice from our parents and Carnegie are well-taken, but this approach might hinder you in your path to becoming a proficient project manager.
Learn to Identify the Problem
Before resolving any problem, you must know what it is. I was speaking with a colleague recently about why his company is experiencing low morale. He told me that employees were concerned about the stability of their jobs, or a steady paycheck. In essence, though, the instability of jobs is a symptom of the problem. After asking probing questions regarding his company, I learned that a couple major contracts were lost because work was outsourced to other countries.
Therefore, the root causes of the problem can be tough economic times or even poor strategic planning. If you target only the symptoms of the problem, you will fail to fix it. In fact, many managers and company leaders take the short-term approach of finding a quick fix or workaround, knowing fully well that it will re-surface in the future. By that time, they hope to be in a different department or organization.
Project Management Means Confronting Problems
Excellent project managers understand the importance of taking action once the problem is identified. For example, when you sense conflict among the team members, you take the time to understand what is causing the conflict. A rift between two team members might exist because each desires to have more control over project objectives. Once the PM understands what is causing the divide, he can implement a strategy to fix it, such as providing a clear definition regarding expectations. The mere fact of addressing the problem can lead to its resolution.
Avoid Taking Sides
Excellent project managers are focused on the objectives of the assignment. You can expect team members to exert pressure on your decision-making, hoping you will see things from their standpoint. You must avoid this pressure, and take a macro perspective to every problem.
Avoid making hasty decisions. This does not mean you should take weeks to decide. Instead, be willing to discuss your problems with colleagues or mentors. You might not get the perfect response, but more information allows you to consider factors that might be overlooked when under pressure.
Dale Carnegie wrote: “Any fool can criticize, condemn, and complain – and most fools do.” As a project manager, you must avoid the temptation to involve personal emotion in matters involving conflict. A professional and proactive approach will help you from acting like a fool.
I was invited to a planning meeting as a subject matter expert (SME). For this particular session, there were only three meeting attendees. I arrived about five minutes early, and proceeded to the assigned conference room. Mike, the meeting coordinator, arrived shortly thereafter. The other SME was running late, which gave Mike and I a chance to chat.
Although Mike called the meeting, he didn’t remember my name. It was also unusual that he would lean back in his chair, stretch demonstratively, and yawn uncontrollably. This was an afternoon meeting, so he should be wide-awake by now.
I get a weird feeling about people who are too relaxed during a meeting. What are they trying to show? Why do they lack the initiative and smartness to conduct themselves in a professional manner? I suppose he felt superior to me, which gave him the privilege to feel like he was lying down in his living room couch.
While we waited, we had a short conversation:
Mike: So … what’s your background?
[Mind you … he invited me because I am a subject matter expert in planning global projects. Yet, he wasn’t sure about my credentials. Weird!]
Me: For the past decade or so, I’ve worked on global IT projects. My expertise is coordinating the efforts of global talent to create custom solutions for clients in the United States.
Mike: I see. How long have you done this kind of work?
[I did just say a decade, which usually translates to 10 years or so. I guess he wasn’t listening.]
Me: This type of work has kept me busy since around 2002. Once I have a clear idea regarding requirements, I look for the right resources to get it done. Technology has made it possible for people from around the world to collaborate and work on projects.
[Finally, at 2:10 p.m., the other SME (Dave) walked in, and the meeting formally began.]
Mike: Dave, I was talking to, uh, uh …
[Mike looked at me … not remembering my name.]
Me: Jimmie.
Mike: Yes. Jimmie and I were talking, and here is what we would like to do.
Although it took two weeks to coordinate our schedules for this meeting, the session required only 20 minutes. In fact, a phone call would have done the trick. There was no reason for Dave and me to drive more than 30 minutes for a meeting that was completed so quickly.
I was unimpressed with Mike because I felt that he was “big-timing” me. In other words, he gave the feeling that he was far too important, and that he was doing us a favor by meeting with us. The yawning and forgetting my name was unprofessional.
What is the point? When you ask others to invest their time on a project or other work effort, you need to value their contributions. As a meeting coordinator, you must be prepared for the agenda items, and look interested. The yawning and lackadaisical attitude must go. There is no place for it in a professional environment.
At minimum, you should make sure and remember the names of people that you invite to your meetings.
Organizational leaders must have a reason to launch projects. The Standish Group conducted a survey of IT companies, and the results concluded that only 34% of all projects are completed. In my consulting work, I’ve learned that most organizations are often well below that mark regarding their project success.
My experience suggests that projects fail mostly because of the following:
(a) no business justification and mission alignment,
(b) lack of leadership funding and support, and
(c) lack of attention to a project management body of knowledge.
In other words, you must have a definable reason to launch a project, the leaders must provide the resources, and a plan is essential.
#1: Know Who You Are
Avoid trying to be everything to everyone. Those who have studied business understand the importance of sticking to your knitting. I remember learning that concept while taking General Business at Montezuma High School in Southwest Kansas. Even then, it made sense to me. You should focus on what you do well. To do that, you must conduct a strategic plan to know your core competencies. All projects that you launch must leverage your skills, assets, knowledge, and competitive edge. For example, Apple is committed to innovation, and Disney World wants to make people happy. Before you launch a project, have the end result in mind.
#2: Know Your Resources
Do you have the people, capital, and knowledge to launch the project? American mechanical engineer, Henry Gantt, created the Gantt Chart, which project managers use today as a graphic schedule to plan and control work. In essence, the chart is a tool for resource optimization. You must make sure you are assigning the right person to do the right job at the right time. To make those assignments, you must have the people in place, and they must have the time and skills to do the work. If they don’t, the project is destined to fail.
#3: Know Your Customer
Many projects are launched to improve organizational efficiencies and to generate revenue, and these projects are often internal in nature. In other words, the customer is the organization itself. If that is the case, you must understand the culture, and determine how it will help or hinder the success of the project. If the customer is external to the organization, it is critical that you leverage your communications plan. As the project manger, you must get sign-offs from the customer to ensure you are on the right track.
Project management is not for everyone. It is not enough to say that you have project management experience. You must have leadership skills to understand why the project is important, and how it will create value to the customer. In other words, project managers must have vision. Failing to have a plan will increase the likelihood of becoming part of the 34% group.
Project managers are constantly on the lookout for excellent team members. When work needs to get done, it’s important that you have energized, optimistic, hard-working, and committed individuals on the team. Of course, these individuals are difficult to find, and even harder to secure for our project activity.
From my experience leading projects, here are skills that I find important for project team members:
Know the Expectations
Before any work can take place, you need to be clear regarding what is expected. If you don’t know, it’s erroneous to assume. For example, if an activity for the project requires scheduling air travel for key stakeholders, you need to confirm the airport preferences. You cannot assume that New York LaGuardia is best for someone from NYC.
Great team members are those who ask plenty of questions at the beginning of the project, such as the following:
- “Jack, I want to make sure I’m clear regarding my work. Do you want me to work with Helen on the marketing campaign? How do you want progress reported?”
- “Laura, it’s great to be on this project, and I’m excited that it will make our company better. From my understanding, we will need three resources from IT. Have we contacted their manager to gain approval for the number of hours we need for our project? I just want to make sure we have the people available for the database work effort.”
- “Roberto, I agree that we need to build the product as soon as possible. However, I think we should contact Legal about the potential intellectual property issues now. We know that some competitors are doing similar work, and this is a base that we need to cover. Would you like me to set up the meeting with Stella in Legal?”
Focus on Execution
There is a tendency to over plan, which means that work becomes too complicated. The successful team member understands that working in chunks or manageable pieces is preferred. A personal example is cleaning your garage. One Saturday, you can remove the trash and other items that will be tossed. The next Saturday, you can purchase and install storage units. On the last Saturday, you can give the garage a good cleaning. In total, you worked 15 hours, but it was done over three weekends. By breaking the project into pieces, you have a better understanding of the work, and you avoid committing all your free time to the project.
The bottom line is that excellent team members will put their heads down and get to work. Once they know what needs to get done, they focus on execution. The ability to stick with one task until it is done separates the average team member from the superstars.
One final point is that excellent team members are optimistic and willing to accept new challenges. You can expect problems along the way, and it’s important to find a solution. The more problems you can solve, the more valuable you are to the team and the organization.
As a business owner for more than 20 years, I realized that my IT business was going to be mediocre if I failed to find new ways to generate income. Every entrepreneur knows that sales is the lifeblood of a startup. My mindset quickly changed to finding new clients who needed help with their businesses, and to increase the work we were doing for our current clients. That combination alone resulted in our business expanding by 500% in the first year.
The point here is that you should consider project management to make your business a success. A project is defined as a temporary endeavor designed to either generate revenue or create efficiencies. The project must have a start and end date, and it must generate a unique product, service, or result. One more thing: it must be unique and not routine work, such as processing payroll or managing customer service calls.
The fact is that there are a ton of potential projects in every business. For example, one project might be to improve the level of customer service provided to your current clients. You can conduct a quick survey to see what is important to them, allowing you to focus on the key result areas. This project on its own will make your clients feel like you care, and you will learn about other products and services you can provide them.
My recommendation is that you spend a little time with the definition of a project. You should call a meeting with the key stakeholders in your company and brainstorm the top three projects that can make an immediate difference for your company. Once those projects are defined, get started with the first one.
Keep the process simple, and start working on that main project. Remember that it must have a start and end date. Therefore, ensure that the project’s scope is well-defined, and that everyone is clear on what needs to be done. Your role as the project manager is to provide guidance, funding, support, and to remove any obstacles that might interfere with the success of the project.
Once you complete Project #1, get to Project #2, and then on to Project #3. This commitment alone will transform your business, and much faster than you think.
As a university instructor and corporate trainer, I often ask students to form small teams when working on course projects. For the most part, this is an easy process, especially because students will already know each other. Even when they lack acquaintance, they gravitate to people with similar interests.
Darla Was Left Hanging
In Week 1 of a recent face-to-face class, Darla was unable to attend. I remind my students that missing the first week of any class will make it difficult to do well. There is so much that takes place, such as forming teams, discussing course requirements, and communicating expectations.
During the class, I mentioned to the students that Darla needed to be placed on a team, and here are the responses I received:
- “We don’t want her on our team. She’s a pain!”
- “She was on our team in the last class, and she hardly ever showed up to our meetings. We definitely don’t want her on our team.”
- “She is a trouble-maker. At the beginning, she tells you that she will do her part, but pretty much disappears.”
- “Darla is weird! I don’t know how she stays employed. I guess she works somewhere, but I’m not sure how she made it through the hiring process.”
Moving Forward
Given the feedback provided in Week 1, I decided to speak to Darla separately. I didn’t wait too long because Darla emailed me the day after class asking about her team assignment. I informed her that because she missed the class, we needed to wait for the next session to discuss her team situation.
I could tell by our email communication that she knew something was out of the ordinary. She was aware that other classmates were unwilling to accept her as a teammate. However, my job as the instructor is to find a place for her, and to monitor the performance of each team member. Given that Darla lacked the support of classmates, I had an uphill challenge.
During Week 2, I approached the members of a small team who could benefit by adding another member. They were less than enthusiastic about having Darla on their team, but the participants acquiesced, and she joined their group. I did make it clear that all students needed to meet the requirements, and that I would keep a close on their individual performance.
The Lesson
Much of the work in today’s organizations requires working in teams. In some cases, you are assigned to a project, and it’s imperative that you contribute based on the expectations. If you fall short, the performance of the team suffers.
As much as possible, avoid developing a “poor performance” reputation. In the example used here, Darla will have a difficult time acclimating with the team. She should first try to focus on the work at hand. By doing a good job with her requirements, the team will gain respect for her. Once the team trusts her, she begins the process of rebuilding her reputation. This same advice holds true in work-related projects.
I participated in a webinar in which a manager was leading the discussion. My role was mainly as an observer, but I would provide project management guidance when necessary. The manager forwarded the participants an agenda several days in advance, and most of us were clear regarding the expectations.
Prior to the meeting, I received a call from Jack, a team member who would also participate in the webinar. He informed me that the manager (Tom) was not well-liked. Tom took over the department about a year ago, and he tried to make radical changes. He wanted his team to do this, to do that, and so on. It was going to be his way or no way at all.
Mission Impossible
Tom’s problem was that he took over a department with veteran employees. They knew the system better than he. In fact, the team of eight people knew they could “gang-up” on Tom and make his life hard. Of course, Tom could strong-arm the decision-making process, but this approach was bound to backfire.
Jack told me the following: “Tom is trying to scare us into doing stuff. Some of his ideas are good, but we are not going to buy into them. If we do, he might think that he has control over us. Until he calms down and listens to us, we will make it difficult for him.”
The Webinar
The day of the webinar arrived, and Tom proceeded through the agenda. For the most part, everyone was civil. A hearty and fruitful discussion ensued. I was surprised that Tom allowed the team to reach consensus on several key points, and the vibes were good in the meeting.
However, near the end of the meeting, Tom asked for volunteers for an important project that had a looming deadline. Jack tipped me off about this requirement, stating that Tom previously sent an email asking for volunteers, but if no one jumped in, he would make mandatory assignments.
When Tom asked for volunteers, the meeting went silent. He waited about 15 seconds, but no one responded. Finally, Tom suggested that he would follow-up via email.
The Problem
Tom has two problems on his plate:
- He started off on the wrong foot by taking an autocratic approach. The sweeping changes he wanted to make were fine, but he needed to first ask the veteran team for suggestions. In other words, getting buy-in first was important.
- Instead of threatening to make mandatory assignments, Tom should approach the team members in a professional manner. He should reinforce the importance of the project, and ask for team member assistance. This is a far more effective approach than giving ultimatums.
Tom has a chance to succeed, but he faces an uphill struggle. He created a deep hole, and it will now take time and patience to get back on track. One recommendation is for Tom to have a one-on-one with each team member to determine what is important to him. In other words, he needs to start anew.
In short, excellent leaders know that change is driven by the people, and not by policies or mandates.
While attending a professional development session in Dallas, I decided to buy a Grande Pike Place at a shop that sold Starbucks coffee. This was not an official Starbucks store, but the signage indicated I could find the popular beverage there.
The shop was about a block from my hotel room, so I made the walk around 6:30 a.m. When I arrived, I noticed the lights out and a small sign stating working hours began at 7:30 a.m. The opening time is unusual because most Starbucks are off-and-running around 5 a.m. in San Antonio, but this shop had its own hours. I suppose this is a supply-and-demand concept that was covered in one of my Economics and Marketing courses while attending undergraduate school at St. Mary’s University. I need to take better notes!
7:30 a.m. Arrives
I went back to my room to review emails. Around 7:25, I walked back to the coffee shop to purchase my hot drink. I even have the Starbucks app on my iPhone, so making purchases is quite easy. However, I know that most of these independent shops do not accept the Starbucks card or app, so I brought 10 bucks with me.
At exactly 7:30 a.m., I was in line and prepared to order my Starbucks coffee. There were two men leaning against the counter, and the employee was making lattes for them. It turns out she was preparing the beverages for other employees, and they walked away without paying.
I approached the counter, and conversation went something like this:
ME: Can I get a Grande Pike Place?
IDA: We’re still closed because the computer is not working.
ME: Right … but I noticed those two men were served, and it is 7:30 a.m.
IDA: Right … but they work here. For me to sell you the coffee, someone has to log me into the register. The code I put in is not allowing access. You’ll have to wait about another 15 minutes. There is another coffee place about two blocks down the street.
ME: I really don’t feel like walking to another location. I guess I will wait until the register is open.
About 10 minutes later, a manager-type person walked up, swiped a card, and entered a code. The register was unlocked, and I paid $2.34 for my Grande Pike Place.
The problem with this scenario is that a customer was denied coffee, but employees were allowed to walk away with free beverages. As a business owner for many years, I would take full accountability for poor training. You cannot allow your employees to handle situations in this way. If the customer is denied coffee, so are the employees. When you play favorites, you lose the trust of your customers.
I’ve shared this incident with a couple colleagues, and one told me that I was overreacting, and that I “should let it go.” The more I think about it, the more it bothers me. I understand that the issue was resolved in 10 minutes, but this has nothing to do with expediency. What concerns me most is the underlying current. Based on this experience, I’m certain this coffee shop has other notable customer service issues that may alienate customers.
Part of me is overreacting, and part of me is right. Go figure!
A recent report by the Association of Certified Fraud Examiners (ACFE) determined that the cost of fraud and abuse was $652 billion. In total, fraud was attributed to 5% of total revenue, and in 42% of the cases, nothing was recovered. If a business is losing 5% of total revenue, imagine the impact on the bottom line. The costs of doing business are constantly increasing, which means you need every single penny to meet your financial obligations.
In its study, the ACFE published the following findings:
- The position of the perpetrator determined the frequency of fraudulent activity.
- Managers were more likely to commit fraud (41.2%).
- Employees were second (39.5%).
- Owners and executives had fewer events of fraud (19.3%)
- While owners and executives had fewer fraud episodes, they took advantage of their opportunities. The study revealed the median loss from these activities was $1,000,000.
- The median loss from managers was $218,000.
- Finally, the theft from employees resulted in a median loss of $78,000.
My Fraud Story
Many years ago, I served as clinic administrator of a practice in Houston. Janet in Accounts Receivable informed me that she was going to take a couple months of vacation time. She had been with the clinic for nearly 30 years, and wanted to spend time with her husband.
A few minutes after this conversation, Ana walked into my office and mentioned she would be willing to assume Janet’s duties. The work required recording the payments from private insurance companies and government-sponsored programs, such as Medicare and Medicaid. Ana mentioned she had worked with Janet in recent weeks and had a clear understanding of the process. I was busy managing the daily activities of our nine surgeons, and I was pleased that Ana was eager to do the work.
What I didn’t know was that Ana had befriended one of the tellers at our bank, essentially setting the stage for fraud. Ana communicated to the teller that the clinic decided to cash a private insurance check in the amount of roughly $1,000 each month, which would be used for petty cash. Private insurance companies paid a fee of approximately $1,000 for colonoscopies at that time, and that was a common procedure for our practice.
With the $1,000 in hand, Ana placed $100 in petty cash and kept the rest. She also deleted the date of service for the procedure. In essence, our audits would not pick up the discrepancy because the transaction disappeared. Ana continued this fraud for a couple of months. She eventually forgot to delete one date of service, and our external accountant, who reviewed our records quarterly, identified the problem. We confronted Ana, and she resigned. To avoid negative publicity, the doctors decided to forego legal action.
Lessons Learned
I learned that checks-and-balances are essential when managing money. While Ana could enter payments into our computer system, another employee should have made the bank deposits. We should also have had a manager approve the deletion of a date of service, or any other transactions pertaining to the customer. I understand more secure practices are commonplace today, but that wasn’t the case back in the early 1990s.
The ACFE provided other tips to protect your organization:
- Conduct a risk assessment
- Ensure you have internal controls in place
- Hire external auditors
- Make sure to hire right – conduct background checks
You must remove the opportunities for fraud to occur. Everyone must fall under the same rules, from the company owner to the courier. You must implement a training program to educate everyone regarding expectations. Of course, the key to a successful anti-fraud program is auditing.
As Ronald Reagan said to Mikhail Gorbachev during the signing of the INF Treaty: Trust, but verify.