A shocking number of small business start ups fail! Is there a method or process to ensure that prospective entrepreneurs will be successful? There are a number of good reasons for failure ranging from lack of skills, no viable market and under capitalisation.  In this article I want to address failure reasons to do with the entrepreneur him/herself.

How do you know whether you have been cut out to be an entrepreneur? Unfortunately there is no institution that can evaluate  and provide a success profile of the ideal entrepreneur. One option is to look at history and see what we can learn from past entrepreneurial successes and failures.

An entrepreneur is an innovator. The product of the innovation is a business. Its uniqueness makes it stand out when compared to other “ordinary” businesses.  It captures the attention and imagination of stakeholders.  The stakeholders are normally customers, employees, suppliers, investors and lenders.

The big question is: “Do I have what it takes to become an entrepreneur?”. An entrepreneur must have an independent temperament.  Entrepreneurs consistently go against the tide. They start companies when others are retrenching; they don’t care about being rejected time and time again; and they trust their gut. Is there a way to measure all of this?

Locus of Control

Some people believe that the results and outcomes in their life are determined by things outside of their control. In other words by fate and independent of their influence, work and decisions. This is called an external locus of control. In Latin locus means place. On the other hand other people believe that the results and outcomes of their life are within their control and determined by their influence, work and decisions. We call this an internal locus of control. The term locus of control was coined by Julian Rotter who did some research on this in the 1950’s. He also developed a questionnaire to measure this in 1966. Locus of control definitively influences entrepreneurial success as evidenced by hundreds if not thousands of research studies performed since the sixties.

An internal locus of control has been one of the psychological characteristics most often used as predictive of entrepreneurship. You believe you have control.

If you want to determine your locus of control profile click on this link http://www.peter-plan.com/locus-of-control/. The link will take you to a zipped file that you can download, unzip and use to easily determine your locus of control. This is a free gift from me and you can use and re-use the quiz indefinitely. After you have completed the quiz return to this article and read the implications of locus of control.

What does it all mean?

People with a high internal locus of control have better control of their behaviour, and are more likely to attempt to influence other people than those with a high external locus of control. High internal locus of control people are more likely to assume that their efforts will be successful. They are more active in seeking information and knowledge concerning their situation. The internal – external locus of control represent two ends of a continuum and is not an either or typology, or putting people into two different boxes.

It should not be thought however, that internality is linked exclusively with attribution to effort and externality with attribution to luck. All of us have a certain degree of luck and disaster  in life. It is however important how you react to different events.

Many internals have grown up with families that modeled typical internal beliefs. These families emphasized effort, education, responsibility and thinking. Parents typically rewarded children for good performance and achievement.

In contrast, externals are typically associated with lower socioeconomic status. Societies experiencing social unrest increase the expectancy of being out-of-control, so people in such societies become more external.

There is also a down side to an external locus of control. When we overestimate our control in a situation, we may become unnecessarily stressed out and anxious over events we have no power over. We can think and worry about all we want to achieve, but nothing we do can change those circumstances. Focusing on these things will only but drain your energy.

When we underestimate our control in a situation, we may unnecessarily settle for things in our life that we actually have the power to change and improve. So instead of changing the situation for the better, we actually settle for something much less. Clearly, relinquishing our power in such situations decreases our well-being.

Living a more satisfying and happy life is directly dependent on how accurate we assess our locus of control. When we use influence in a situation where we actually have power, we maximize our happiness and well-being in the best possible way, given our circumstances.

Fortunately, Locus of Control is generally considered to be a learned trait rather than an innate personality construct. Your locus of control can be influenced through your life experiences and personal growth…for example by working with a therapist, experiencing the power of life coaching, studying self-improvement material and attending self-awareness workshops.

Benefits of an Internal Locus of Control

In general, people with an internal locus of control:

• Engage in activities that will improve their situation.
• Emphasize striving for achievement.
• Work hard to develop their knowledge, skills and abilities.
• Are inquisitive, and try to figure out why things turned out the way they did.
• Take note of information that they can use to create positive outcomes in the future.
• Identify opportunities because of their perceptual awareness

Do people with an internal locus of control perform better at entrepreneurial activities than people with an external locus of control?  Theory suggest that the answer is yes. People who have more internal locus of control form stronger positive beliefs that they can exploit opportunities, obtain resources, organise businesses and develop a strategy than people who have more external locus of control. Because success at an activity depends in part on a person’s willingness to believe in their own ability to undertake that activity, those people with more internal locus of control perform better at entrepreneurial activity.

Assisting a person to move their external locus of control more towards an internal locus of control and helping them to take more responsibility for all aspects of their life is a key aspect of recovering from depression, raising self-esteem and building confidence.

What can you do to shift your locus of control to the internal side?

1. Set goals for yourself and note how, by working towards goals and achieving them, you are controlling what happens in your life. As you do this, you’ll find that your self-confidence builds.
2. Develop your decision making and problem solving skills so that you can feel more confident and in control of what happens.
3. Some of the actions you can follow in improved decision making and problem solving skills are:
• Realise that you always have a choice to change your situation. Even if you don’t like the choices available at the moment, even if the only change you can make is in your attitude, you always have some choices.
• When you feel trapped, make a list of all possible courses of action. Just brainstorm and write things down without evaluating them first.
• You may want to also brainstorm with a friend to get more ideas that you may not have initially considered. Don’t shoot down these ideas right away. Just write them down.
• When you have a list, evaluate each one and decide on the best course of action for you, and keep the others in the back of your mind as alternative options. You may end up with the same answer you had before the brainstorming session,   but this exercise can open your eyes to the amount of choices you have in a given situation. Seeing new possibilities will become more of a habit.
• Repeat this practice when you feel trapped in frustrating situations in your life. In more casual, everyday situations, you can still expand your mind to new possibilities by doing this quickly and mentally

Your self-talk is important

You live with an ever-present companion—you! You spend more time with yourself than with anyone else. As a consequence, you have more influence over yourself and more ability to create your future than anyone else. This internal companion is you talking to you, inside your mind. You are the creator of your internal environment. You guide yourself, criticise yourself, give to or withhold from yourself, belittle or support yourself. You can either support an internal or external locus of control through self talk. Psychologists call self-talk that is soothing and brings you back to balance “compassionate self-talk” and “the language of self-support”.

Talking to yourself compassionately can be learned. The key is self nurturing. Imagine how a good friend would talk to you and then talk to yourself that way. Be patient to yourself it could take a long time to develop positive self empowering talk.

Finally, quit making excuses and start asking yourself, “What can I do to change this situation?” Tell yourself that success is up to you. Tell yourself that you can’t expect others to be responsible, that you must take the initiative to change your life and achieve what you desire.

Who pull the strings in your life?

Selected references:

1. Scott, Andrew Shane. 2003 A general theory of entrepreneurship. Edward Elgar Publishing.
2. Develop an internal locus of control. Retrieved from http://stress.about.com/od/psychologicalconditions/ht/locus.htm

Buy the book of Shane Scott on entrepreneurship here:

The industrial revolution with mass industrialisation and mechanisation took most of the thinking out of jobs. Workers had to follow standard operating procedures controlled by supervisors. Initially there were not enough competent people to perform all the work. Sociologists at the time warned that humankind can’t be expected to work in small confined spaces and for long hours in factories. This will surely lead to disaster. On the contrary men adapted so well to office life, factories and the way we do business that they forgot what it was to be an entrepreneur.

The well is dry today. There is simply not enough work available for all people. People became so conditioned to drink the bottle from mother that they can’t fend for themselves today and blame the government or whoever they can find for problems and lack of work.

It is however not all bad news. Because of the revolution in communication and technology very small organisations ranging from 1 to 20 people can be globally competitive today. Many people argue that it is better to be a small boss than a big servant. Big companies wanting to survive also have to think and act like entrepreneurs.

Compared to the past, people are much better educated and because of competition have a range of options and choices in fulfilling their needs. In the old business model the consumer had to take what was produced. Today the business model changed to satisfying the needs of the consumer. The million dollar question is how to anticipate client needs and finding a niche for your service and products. One must be aware what is going on in society. One good method is to perform a trend analysis and then to follow and interpret the trends on a regular basis.

A trend is the general direction in which something is developing or moving. Knowing and understanding consumer trends will help you with business and marketing. The trends will give you a good indication how the issues and needs of society are moving.  Society can only handle a limited number of trends at the same time. Things move in and out of favour according to a change in trends. Trend interpretation will give you an indication of the direction business is moving in. Trends are predictive because they start small and then gain momentum.

One good example of a trend is the movement from analogue to digital technology. If I am correct it started in 1970 with watches. This trend influenced most industries in the world in some or other way. The footprints of the digital trend can be seen in instrumentation, music, broadcasting, television and photography just to mention a few. Television is one of the last industries to make the transition to digital technology.

Macro trends are the big trends in society that will have a lasting and huge impact on the way we live and do business. If you align your business with a macro trend then you are assured of finding a niche that you can service over a longer period and build a sustainable business. We want to avoid bubbles and Hula hoop cycles.

One macro trend is that of corporate technology in the hands of Citizens. Communication technology as a commodity has caused an ultra-connected society who is now, more than ever, empowered to interact and be heard

One of the main outcomes is that normal, everyday citizens, can communicate and build valuable products and services, often with little or no cost, that can compete directly with companies who invest millions in developing offerings and advertising.

The agility of common small business people beats the oil tanker speed of many large businesses that were once safe in the knowledge that their competencies and technology were protected. Entrepreneurs perform excellent marketing using the social networks such as Facebook and Twitter. The rules of conducting business are changing in favour of smaller business and big companies willing to play according to the new rules.

As an entrepreneur or small business you don’t have to do all the work yourself re trends and business information. Most of it you can get for free on the internet. You must just make sure to identify and tap into relevant information, user groups and experts. Obviously you must understand your business model and strategy and interpret the information to understand what is really applicable to your business. What are the opportunities and threats?  Build or acquire competencies to exploit good opportunities and grow your business.

Ultimately we live in a world where the fittest will survive and live well. It is time to show courage! Ask yourself; are you the predator or the prey? “It’s time to eat….or be eaten!”

Picture from http://www.lifehealthwellness.com/2011/04/predator-or-prey-time-to-eat-or-be.html

Selected references:

1. MacDonald J (2009). The first 6 Macro Trends of the 21st Century: Retrieved from www.thisfluidworld.com
2. Naisbitt John. 1982. Megatrends: Ten New Directions Transforming Our Lives. Warner Books Inc

A business model is less detailed than a business plan.  A business model is not a business plan. A business plan describes how you will execute your business model.  According to Roger Clarke (2004) a business model should answer 4 basic questions.

1. Who pays? The consumer, producer, or third parties?
2. What for? Goods, services, expertise, assurances of quality or security.)
3. To whom?
4. Why? – The perceived value

A business model defines the manner by which a business delivers value to customers, entices customers to pay for value, and converts those payments to profit.  It therefore reflects your proposition about what customers want, how they want it, and how a business can organise to best meet those needs, get paid for doing so, and make a profit. The value proposition is the reason why clients favour a specific provider over another one.

We group customers into various segments according to their needs and characteristics. Understanding and meeting customer needs is a pivotal point in the development of business models. Relationships and servicing are established with customer segments according to their needs. Revenue streams are generated from each customer segment. One must know for what value customer segments are willing to pay.

Each value proposition consists of a group or bundle of benefits that a business offers customers. Customers don’t buy product specifications and features. They buy the  perceived advantages and benefits of a service or product. Most yuppies driving modern motor cars with the best sound systems care less about the features of the combustion engine and latest components of an electronic circuit.

Over the years, business models have become much more sophisticated. Instead of just offering a basic product or service, businesses offered a basic product that will ensure the use of additional products or services.  A business will sell you an inexpensive printer for your computer to ensure that you will buy their ink cartridges. This is called the bait and hook business model.  Another good example is cheap cell phones (bait) and the hook airtime.

The simplest business model may the best. If you have products and services that is in high demand it will simply be easier to sell. A very complex range of products that is not user friendly is much more difficult to sell.

Business ideas could have various origins. The sources could be:

• An unsatisfied customer need . Many successful entrepreneurs start a business because their own personal needs couldn’t be satisfied by the market.
• A technology (innovation) that allows doing business in a different or more efficient way. Think of how Skype started offering free phone calls because they used the readily available and free Internet as an infrastructure, rather than a proprietary network.
• A new product or service that the market hasn’t seen yet, or that is offered with a different or better value proposition. Various cheap flights were introduced all over the world during the last 5 years. Apple’s iPad is another example with the company selling 1 million iPads in less than one month.

An idea must be developed into a business model. During the business model development process it is better to generate alternative business models or prototypes rather than one single model. Evaluate the strengths and weaknesses of several models. This should eventually lead to a better choice of business model.

Test your business ideas by considering the followings things:

• Customers: Who are the prospective customers for the business idea? What are their needs? Are there enough potential customers? Do they have buying power? Are they easy to reach?
• Trends: What are the key trends that may affect the business idea? Could some of the key trends render the business idea obsolete in the future e.g. technical and legal trends. Are key trends going to boost the business idea in the future. Socio-economic trends play a very big role. Better education, food and health care cause people to live much longer. This has an extensive impact on the product and service demands of older people.
• Competitors: Which other companies are already operating in this area? What are their key products and services? Who are the key role players in this area? How will you compete?
• Macro environment: Which macro-factors must be in place to make the idea reality? The macro environment consists of forces that originate outside of an organisation and generally cannot be altered by actions of the organization. E.g. The sociocultural dimensions of the environment consist of customs, lifestyles, and values that characterise the society in which the business operates. In many developing countries people changed from active life styles to sedentary lifestyles  and consuming unhealthy foods in too great quantities. This has an chain effect on what is demanded by them.  Because of life style change 90 million people in China are suffering from diabetes today.

A business model that works and makes sense today might be outdated and obsolete in the near future. You need to have a good understanding of a model’s environment and how it might evolve in the future in order to adapt or redefine the business model. The future is never certain but trend analysis and scenario building will be of great assistance. Painting pictures of the future makes it much easier to generate potential business models.

Some people think the e-commerce is so different that you only need a “black box” to generate money.  Many prospective entrepreneurs in the e-commerce environment waste their time by following unscrupulous “gurus” selling them 7 figure money pumping machines making money while they sleep. Almost all of these “business models” land the customer out of pocket with nothing in return. If you don’t understand all the components and see the business model in successful operation don’t buy into it. Behind all transactions are real people with real needs. Money simply won’t be printed electronically out of thin air.

Selected references

1. Osterwalder A and Pigneur Y, (2010). Business Model Generation. John Wiley & Sons Incorporated.
2. Clarke, Roger, (2004) Open source software and open content as models for e-business. Retrieved from http://www.rogerclarke.com/EC/Bled04.html
3. http://www.businessmodelalchemist.com/

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Resources are the means we use to achieve project objectives. The primary resource is obviously people with applicable skills and competencies. The other main grouping of resources we need includes capital, facilities, equipment, material and information. There is usually a gap between the investment reach of a project and the project demands. See diagram 1 below

In order to ensure a cost effective application of required resources we must perform a proper needs analysis in order to define the project goals and objectives. The project’s baseline that must be resourced will be known after a requirement specification has been completed. The WBS is the base document for determining resource requirements. The requirement specification will spell out the real requirements to achieve through the specific project.

The objective of this article is to provide some guidelines and advice to determine resource requirements and the process of acquiring and managing resources.

Inputs to resource planning

• The WBS identifies the project elements that will need resources. It is therefore  the primary input to resource planning
• Historical information as to what types of resources were required for similar work on previous projects is valuable input. In many instances there are industry standards available that you can consult
• The scope statement contains the project justification and the project objectives which should be considered
• A resource pool description is another useful input. It constitutes knowledge of what resources (people, equipment and material) are potentially available

Resource estimation

Resource estimation is a structured prediction of the cost and other resources required to execute a task. One of the primary functions of the process is to establish a control basis. Therefore the more accurate the estimation, the more reliable the control system becomes.

The required accuracy and effort going into resource estimation can be influenced by the element of uncertainty and risk involved because of technical complexity and novelty of the project. The expected price basis of the contract could make resource estimation a critical factor. The higher the risk the more important it becomes to have a realistic estimation, which implies a more detailed process.

The amount of effort that it will take to complete a task is also important. Effort is determined by the time it will take to complete a task. Once you understand the effort that’s required for a project, you can assign resources to determine how long the project will take and estimate human resources and other resource costs.

A properly documented Resource Plan will specify the exact quantities of human resources, equipment and materials needed to complete your project.

Resource acquisition

Resource acquisition refers to the process of physically securing the necessary inputs. All resources required have to be paid for in some way or another. The financing of a project therefore plays an essential role in the acquisition process.

The acquisition process must be managed properly to take care of possible seasonal shortages, labour disputes, equipment breakdowns, competing demands, delayed deliveries and other things that may go wrong. The project plan may have to be modified to accommodate or work around supply problems.

Resource levelling

Resource levelling is the process that ensures resource demand does not exceed resource availability and vice versa. We don’t want extreme peaks and valleys in the execution of the tasks. The first step is usually to move non critical tasks with float to a later date. If you are forced to reschedule a task on the critical path it would influence the completion dates of successive tasks. Check to see whether it will have an influence on meeting the project deadline.

Human resource planning

We use a responsibility assignment matrix to allocate roles and responsibilities. The WBS is the primary document for doing this. List the project activities on the left-hand side of the matrix and role-players on top of the matrix. List a brief description of the work to be done in the matrix cells. After completion of the RAM you will know exactly who will do what on the project and what their respective roles are. If it is a large project you can then draw up an organisation chart for the project. Once the staff have been assigned you can plan for briefings, coaching, training and all the activities re the management of the project teams and staff.

Resource allocation

The different types and quantities of resources must be allocated to the project as needed to perform the activities. A schedule for this must be maintained to ensure that the allocation process takes place on time and in the right quantities. In many disciplines there are specific methods and documentation to ensure this e.g. a bill of materials. There may also be some conflicting needs for equipment that must be managed.

The delivery of resources is a very important point. During contracting you must know exactly where resources will be originated and where it will be delivered to. Sometimes delivery to site is a good option. You don’t want to be liable for transportation costs of equipment that may be sourced more than thousand kilometres away.

Conclusion

Although I have discussed the most important aspects in this article there are many other tasks to perform in order to deal with the resource requirement process fully. The resourcing of a project will also be dependent on the procurement process which includes selection criteria, resource cycles, payment and storage. Examine your project and decide how the project should be resourced and what the critical factors are.

I am currently developing an online project management course based on the Moodle Learning Management System. It is a platform with a virtual classroom where you have a learning space with different resources e.g. text lessons, discussion forum, templates, video and chat. Interaction makes the learning interesting and much more dynamic than traditional methods. I will also cover the resourcing of a project fully in the online course.

Resource

You can access free web based resource planning software at http://www.yutiti.com/yutiti/index.jsp?act=f

The scope of a project tells us what the project is about. It defines what is included in the project and also what is excluded from the project. We can therefore say that the scope is a definition of the end result or mission of the project. Usually a product or service is delivered for yourself or a client/customer.

A poorly defined scope is one of the main causes of project failures. If the project does not satisfy the real needs of a customer it is doomed to fail. An incomplete scope will not cover all the needs and issues to be addressed. It is therefore imperative that the scope should be developed under the direction of the project manager and the customer. The expected results should be described in a specific tangible and measurable way.

The scope definition is a document that will be published and used by the project owner and project participants for planning and measuring project success.
The scope checklist
• Project requirements
• Project objectives
• Deliverables
• Stakeholder expectations
• Criteria of acceptance
• Costs
• Milestones
• Limits and exclusions
• Risks

Project requirements

Requirement are the demands and obligations that a project must meet. There are two types of requirements namely product requirements or features and process or function requirements.

Product requirements describe the characteristics of the deliverables. If you were building a house most of the requirements would be product based. This might include the floor coverage, number of rooms, roof construction, type of floor, energy requirements, colour of the walls etc.

Process requirements or functions. Process requirements describe how people interact with a product and how a product interacts with other products. For example, when you discuss how data gets moved and how business transactions flow from one point to another, you are describing process requirements. Functional requirements are those things the product must do. This is determined by examining the work that has to be performed.

Project objectives

The major goal of a project is to satisfy a customer’s need. A project have a specific and defined objective e.g. to build a new two story house or to develop a new software trading package at a specific defined time. Other objectives describe the cost and quality and performance. Objectives should be agreed to and defined before the project starts.

A project objective should be written so that it can be evaluated at the conclusion of a project to see whether it was achieved. A technique to achieve this is to write SMART objectives. – Specific, Measurable, Attainable/Achievable, Realistic, and Time-bound.

Objectives are important for several reasons:

1. Objectives outline the business terms and once approved, they represent an agreement between the project manager and the project sponsor (and other major stakeholders) on the main purpose of the project.
2. The approved objectives represent an agreement between the project manager and other major stakeholders on the main purpose of the project.
3. Objectives help to frame the project and to determine deliverables needed to achieve the objectives.

Deliverables

Deliverables are the specific outputs over the life of a project. List the major deliverables. What will be on the table that there is not now? A deliverable is a tangible verifiable work product. Describe the metrics and attributes of the deliverables. List the major mile stones.

Stakeholder expectations

No matter how careful you perform the needs analysis there will always be a margin of errors, omissions and mistakes in identifying the needs. What the client wants may not be within the investment reach of the project. It is therefore imperative to manage stakeholder needs carefully. For commercial projects the agreement of criteria of acceptance is very important to ensure that payment for the project will take place.

Costs

We need a forecast of what the project is going to cost in order to determine whether the project will be feasible and to budget for the project. Project stakeholders prefer accurate cost and time estimates but this must be tempered with the inherent uncertainty in many projects. Cost time and budget estimates are the foundation for control. They serve as the standard for comparison of actual and plan throughout the life cycle of the project.

The level of the project

The nature, complexity, size and extent of projects differ greatly. To define the scope of a small ordinary project is relatively easy and simple. It can be done in a matter of a few hours. On the other hand to prepare the scope of large civil, mechanical or IT project could take from weeks to months. A large complex scope development will go through several stages of development. In some industries they first develop a high level scope as part of the project charter and later  a low level detailed scope.  A high level work breakdown will first be done for big projects. However the end result of a scope should be to clearly define the intended end result of the project in enough detail that is required to plan the project properly.

Constraints

Project constraints impede or delay activities. Constraints must therefore be considered in scheduling. There are different types of constraints e.g. technical or logic constraints where the work must follow a certain logical sequence. Building a house must start with the foundation. Resources people and equipment may sometimes be a constraint. Some key staff may only be available on a part time basis. Some staff may lack technical and operational experience. The type of work may be new and never have been done before. The learning curve may therefore be quite steep.

Project risk

One very important aspect often missing from project plans is a serious consideration of what can go wrong with the project. It is a fact of life that risk is an inherent part of a project. Depending on personal temperament and organizational culture we all have different risk tolerances. Risk is the chance that an undesirable event will occur and the consequences of all its possible outcomes. A proper risk assessment must be done to identify probable risk events. The risk assessment will play an important role in the decision to proceed with a project and how to plan preventative and contingent actions.

Whether your project is big or small, complex or simple it will pay to know exactly what you want to achieve before you start. Machiavelli said “I have so much more courage if I start prepared.”

Selected references

Mochal, T (2005, Aug). Use project objectives to structure the project and validate success [Online]. Available: http://articles.techrepublic.com.com/ 5100-10878_11-5839938.html. [2010, March 30].

Gray F.C & Larson E.W (2003). Project management – The managerial process. Mc Graw-Hill.

Many people use the project management approach
Ownership of project management certainly does not only belong to the “professionals” in medium to large organizations. Today we have many small business owners and entrepreneurs who use the project management approach and process to achieve deliverables in a speedy cost effective and meaningful way. The modern organization is much flatter than the traditional hierarchy of the past. In many instances redundant middle and senior managers are replaced by temporary managers working on a project basis.

Project management is also applied for domestic, social and sport reasons. People sometimes want to make alterations to the home. Trial and error and reliance on the contractor may be costly and not good enough anymore. Schools and colleges have many projects to enhance learning and raising funds.

Project management is also used to solve social problems. In case of an emergency caused by a hurricanes or a tsunami effectiveness and speed is very important. The whole world through modern media evaluate disaster management from a critical viewpoint.

What is a project?
A project is a series of inter-related activities that are undertaken to accomplish a specific goal or end result. We can also add that it is usually complex, non routine and a one-time effort according to certain specifications to meet customer needs.

Project management is a proven method to produce deliverables according to a specified standard at a pre determined cost within a defined time frame meeting specified quality standards.

Risk and uncertainty management
According to my associate Peter Michel project management is, to a large extent, aimed at the reduction of risk and uncertainty and as such we utilize of a number of techniques which were developed for this purpose. Fundamental to all of these is the principle of breaking work down into manageable units along a principle of divide and conquer. The single most important technique towards this aim is the life-cycle approach through which a task is executed by adhering to its natural chronological life-cycle.

Goal-Orientation
We use the project management approach to achieve an improved situation through structured change. This objective to reach a superior position forms the major driving force in the execution of a project and is embedded in the discipline throughout the project: If you can dream it project management is the way to achieve it.

There is ample evidence to convince us that project management is an approach, process and technique to produce deliverables of a certain type. It is also a way to make your dreams come true. A goal orientation means we start at the end where we would like to be and work back to develop the best plan for achieving the desired end result.

Emphasis of the importance of the result
Since project management is primarily aimed at the achievement of specific objectives within predetermined time frames its ultimate focus is on an intended outcome or result. This is achieved through the structured application of, amongst others, the following project management techniques:

• Clearly specified and measurable objectives
• Proper work breakdown and structure
• Clearly defined deliverables and milestones
• Defined schedule from beginning to end
• Financial discipline

Specific methodologies have been developed to support the use of these techniques. The application of these techniques, tools and methods distinguishes the professional from the amateur project manager and participant. It is the purpose of this blog to share the tools and techniques of project management with you.

Project management success criteria
The success of a project is determined largely by the following criteria, often referred to as project drivers:

• Cost (within budget)
• Schedule (within time)
• Technical Performance (delivering of physical requirement)
• Client Satisfaction (needs fulfilment and interaction)
• Corporate Responsibility (not disturbing balance of organisation)

The importance of the project success criteria may vary from project to project.

If you want to succeed and achieve your goals there is no other way than the project management process to produce deliverables and complete projects. Project management is a learnable skill. As a manager or entrepreneur how good is your project management skills?

The butterfly effect

Many project managers and stakeholders are scared of the butterfly effect. To refresh your memory here is a very short version. A person by the name of Lorentz was looking for a way to model the action of chaotic behaviour of a gaseous system. His computer program was started with inputs that were slightly different from his previous models. When he checked the results a day later he was amazed to find very different end results. This effect is called the butterfly effect because in analogy when a butterfly flapping its wings in Brazil it could cause a tornado in Texas. Small variations at the inception of a project could cause large scale unwanted/wanted effects at the end of a project.

Lorenz made a significant breakthrough in not only chaos theory, but life. Lorenz had proved that complex, dynamical systems show order, but they never repeat. Since our world is classified as a dynamical, complex system, our lives, our weather, and our experiences will never repeat; however, they should form patterns.

In mathematics, a nonlinear system does not satisfy the superposition principle, of whose output is not proportional to its input. Linear is a property of straight lines, of simple proportions, of predictability and good behaviour. Nonlinear on the other hand applies to systems that do unpredictable things that cannot be solved exactly and need to be approximated, the one-offs that don’t fit the expected pattern.

Project management takes place in a nonlinear economic and social system. We should therefore do our best when conducting a project to stack the odds in our favour by ensuring favourable initial conditions.

Project management

Project management as a profession is young but not the implementation of projects. We find large and small projects as we go back in history. Many of them marvellous achievements. A few that I can recall are the Tower of Babel that we know was not a success. On the other hand Noah’s Ark ensured the survival of many species. Up until today we can’t replicate the results of the pyramid constructors. The fundamental prerequisite of a project is its temporary nature and a specific time line.

Project management is a method of management applying unique tools e.g. a phased approach and a WBS (work breakdown structure) to lower the risk of the project and make second order problems visible. In order to manage a project from start to finish we model the project lifecycle; that is how the project is planned, controlled and monitored from its inception to its completion. Many variables and issues when conducting a project are not controllable in line with the behaviour of a non linear system.

Organisation strategy and projects

The logical starting place to ensure project success is the strategic reason for the project.  All the “what’s and why’s” of the project. Strategic management provides the theme and focus of the future direction of the organisation. Every project should contribute value to the organisation’s strategic plan. Each project manager should also see her/his project in relation to other projects. The small business and entrepreneur should ask the same questions.

• Do you have a good business case? How will your project add value?
• The requirements engineering process should be properly conducted and not be merely a wish list but reflect the real needs of the client.

Systems thinking

Holos is a Geek word meaning all, entire, total. This means we should consider the total organisation when performing a project. It is important for the whole organisation to benefit when we run a project. Systems thinking are about gaining insights into the whole by understanding the linkages and interactions between the elements that comprise the whole system.

• The “solution” of the project must be considered for creating other unintended problems. The “green” electric cars that are becoming popular lately may after all be not so “green” in many countries because we use coal to generate the electricity for charging the car batteries. The burning of coal causes large scale pollution of the atmosphere.  To understand the butterfly effect one must be able to do systems thinking.
• Use the life cycle approach. That is all phases or stages between the project’s conception and its termination. We develop a standard set of outputs for each phase.

Planning

A project should have a good plan. Planning is part of the inception process. It is the foundation of the project. The plan should be achievable. Some projects plans are not realistic and based on wishful thinking and conjecture. No matter how many people are involved it takes on average 9 months for a baby to be born.

Involve stakeholders in the planning process at an early opportunity to ensure good initial conditions. The project stakeholders will contribute to comprehensively identify requirements; needs and possible risks/opportunities. The client must not be seen as an enemy but rather as an ally.

Risk management

It is important to recognise potential and unforeseen trouble.  In project management we take certain risks in order to achieve our aims. Some risk events are predictable and others may be a total surprise for us. Preventative planning is an attempt in creating favourable initial conditions. People tend to focus on consequences and not on the events that could produce the consequences.

Conclusion

Modern project management requires a new way of thinking in line with nonlinear and complexity theory. A project is much more than an administrative process of identifying deliverables and putting them in a sequence in order to draw a bar chart for tracking purposes. We have seen that we must develop a new way of thinking being able to identify and develop favourable initial conditions to improve the chance of project success. We must also remember that a butterfly is not a better caterpillar but an entirely different creature. More about this in a next article.

Selected references:

Lucas, C. (2007, June). Nonlinear Science – Chaos Tamed [Online]. Available: http://www.calresco.org/nonlin.htm. [2009, September 1].

Donahue Manus J., III (1997 December). An Introduction to Mathematical Chaos Theory and Fractal Geometry. [Online].Available: http://www.fractalfinance.com/chaostheory.htm. 2009 September 1].

Aim:
Providing resources
The aim of this blog is to provide a resource to people who want to apply practical project management. It is a resource for the individual who wants to use project management for private or corporate reasons. Some people want to improve themselves academically. This is catered for by specific institutions. We will refer you to applicable institutions and also assist in the preparation of academical studies. Whether you are an entrepreneur or a manager in a formal enterprise this site will be of great assistance to you in the practical application of project management.

Planned outline of the blog
Business and project management:

• What should the project manager/participant know about business? What should the business manager know about project management?

• Developing a basic business plan.

• How do I finance my project? Sources of financing.

• Training in project management – Hands on courses and workshops to build your project management competences and skills. On line and residential.

• Education – How to further yourself academically. Selecting the right institution and preparing yourself.

The role of the project manager (some of the functions)

• Leadership
• Management
• Delegation
• Hiring and selecting the right staff
• Interpersonal skills
• Problem solving

Resources

• Books –selected books that you can buy from the blog.

• Articles – relevant articles where we will discuss topics of interest.

• Tutorials – video tutorials on how to use some of the project management tools e.g. developing a network diagram.

• Templates – how to develop the scope and charter for your project.

• Assessment tools – how to appoint the “right” person on your team. Appointing the best contractor.

• Software – how to select software applicable for your project.

• Consulting service – using us to plan or re plan a project and assist in managing the project.