Do You Manage the Leading or Lagging Factors?

PM Commentary by Stacy Goff, asapm President, IPMA VP.

We have just returned from the outstanding-as-usual 2012 Resource Planning Summit, organized by the irrepressible Dick Rutledge, dean of the PM-related conference providers. Only a few others operate at the same level of excellence. One of the key differentiators of Rutledge’s events is his ruthless demands of his speakers for audience take-aways and truly new ideas, as opposed to retreads of tired themes. And this time, we experienced those demands first-hand, as we were a presenter–our first opportunity in the four events we have supported.

Our presentation, Tip of the Iceberg: Managing the Entire ‘berg Improves PM Performance, was developed for this audience of key managers and enterprise leaders. The presentation looked at project and program decision-making from the perspective of top Executives–the tip of the iceberg, as it were. And we identified key practices that Managers in the Middle follow when they add clear value for their executives, their project teams and their organizations.

We asserted, as we did in our 2005 article, Project Levers and Gauges, that the most-effective project and program managers don’t just provide lagging data, they also provide leading information. And, we have carried the theme further, pointing out that this leading information is a well-kept secret of the most effective managers of project managers.

But, let’s start with the background. Many are familiar with the old misconceptions of project management, illustrated by the Triple Constraint, the Iron or Golden Triangle, or some other name. It often includes Time, Cost and Scope. Sometimes Quality is there instead of Scope. Sometimes Performance is the third parameter, which might include Quality and Scope. So far, so good; but why do we call this a misconception in project management?

Because, while those often-named factors are important, one differentiator of competent, performing project managers is which you manage and which you monitor. Less-effective PMs try to control the easy to measure, but lagging factors. We understood this weakness in the early 1980s when we published the Project Vital Signs, shown at right. Yes, there are more than three of them, and our assertion then and through today is that one must manage all of them.

Some of these factors may look familiar to you, because they are similar to the knowledge areas in Max Wideman’s 1986 PMBOK® and Duncan’s 2006 PMBOK Guide (we originally called #6 Resources). But this is just background on the most-discussed part of our Resource Planning Summit presentation.

Planning Leading and Lagging Factors
In 1991 we began helping our customers to track measures or indicators for each of these “vital signs.”Note that the measures varied with the organization, because some had no reliable measurements in a few of the areas. When a project’s Baseline was established, we captured that baseline across all factors as 100%, as shown at left.

Today, when we show this diagram, the first question of most savvy managers is “how do we measure or indicate the Talent, Scope and Risk?” As mentioned above, these vary with the organization, and with their ability to measure these harder-to-quantify factors. But even the Time and Cost factors must be evaluated against true baselines, rather than arbitrary deadlines and budgets, mandated before the requirements were understood.

Tracking the Factors
Next, we see (at right) the first approved variance from the plan. This could occur weeks or months after Baseline approval, but more-often happens at a major milestone, or stage ending review. We will make several observations about the status, based on the diagram at the right.

Note that this update is a study in cause and effect. Clearly, as pointed out by the arrows, things have changed. But which is/are the causes, and which are the effect? Our assertion (and frequent experience) is that Talent changed. For example, perhaps a commitment to place the top engineer on the project was broken, or a priority change caused that person to be removed and replaced with a less-qualified person.

In other words, Talent goes down by a measurable amount. The outcome: Cost, Time and Quality move a measurable amount in the wrong directions. Note that, in this example at least, the Leading Factor is Talent; the impact might be immediately obvious to the team. But the Lagging Factors may not show up in project reports about Time and Cost for weeks or months—if the team fails to alert leadership about the consequences of lost Talent.

Taking Action
Effective teams do not just stand aside when challenged; first they escalate the problem, and its impact, to their leadership. Then, either with their support, or without it in cases when they receive no response, they act.

Study the chart on the left, which shows the impact of project team actions taken. What was the action, and what was the impact? Aided by the arrows, we can see that we selectively reduced Scope, which brought Cost and Time back down. It appears that Quality has also recovered a bit.

But now, Risk has soared! The good news: Risk has never hurt a project. It is Risk Realized that does so, and that manifests itself in Time, Cost and Quality; perhaps it also manifests in failure to meet the business need.

Intuitively Obvious Insights
Each time we discuss this sequence of charts, we see aha’s from project managers and their managers. The same thing happened at the Resource Management Summit, a highly receptive audience for this take-away. The aha’s are intuitively obvious, but not commonly practiced. In our work, we find few project and program managers who intentionally manage their initiatives with this insight. We find more who quickly grasp it, and begin to apply it.

Managers who add value in their organization immediately understand this leading and lagging factors approach, but then they wonder why they seldom receive this type of information from their project managers. Whether these are first-level managers, or somewhere in the layers in the middle, there are several clear take-aways:

1. You can see, from this chart sequence, that the factors above the horizontal line are Lagging Factors, and the ones below the line are the Leading Factors. As a project manager, which do you baseline, measure, manage and communicate? As a manager, which do you hear, act upon and communicate?

2. It is important to convey to managers the potential impact on Lagging factors, as part of communicating the status of Leading factors. For example, if we lost that Engineer, we might be able to get her back if we can identify the imminent consequences in Time and Cost. If we instead only use this information as an excuse after-the-fact, we are not doing our job in managing decision-making information.

3. It is easier to manage the leading factors than to try to control the Lagging factors. Yet the latter is what too many project managers (not-yet-competent ones) try to do. It does a manager no good to be informed that we drove off the road last Thursday. You’d rather hear: “Turn Left Now” while there is time to correct.

4. Managers who act on Leading Factor information when they can, and communicate upward, across and outward when the occasion merits, add value to everything they touch. Those who don’t, don’t.

Changing Behavior
If Skinner is correct, and we can change behavior, then you have potential Lessons Earned from this posting. For example, in our workshops, for years we have asked the question, “Which of the three Vital Signs do you hear the greatest emphasis upon during the project?” We usually hear Time and Cost, with either Quality or Scope as the third. This evokes and perpetuates the obsolete Triple Constraint.

And when we then ask, “A year after the project is complete, which ones are most important then?” Usually the reply includes the right Scope, at the right level of Quality, with either Risk or Talent as the third. Ironic, that the criteria for success during the project changes when it is too late to do anything about the lasting results.

While we called these leading and lagging factors Levers and Gauges in our 2005 article, the secret remains the same: Manage the levers, and monitor the gauges.

For those who prefer a more readable version of the small chart used above, click this link.

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