Project Management

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BIG Ambition

When funds are tighter, teams must prioritize tasks and objectives.

BY HAYLEY GRGURICH | ILLUSTRATION BY PETE RYAN

SMALL Budget

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BIG Ambition

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Economists and C-suite executives can’t come to a consensus. It’s unanimous, though, that optimism has waned and executives are tempering their expectations: CEO confidence in one- and three- year revenue growth at their organizations has either plateaued or fallen in all 90 regions in which PwC conducted its 2019 annual CEO survey.

For companies that want to remain competitive, that flatlined confidence need not send portfolios grinding to a halt—but it may well impact project managers and the budgets behind the initiatives they manage.

A 2018 Bain & Co. analysis found that companies that reacted more offensively across their portfo- lios—launching new R&D projects, greenlighting change initiatives, expanding into new arenas— emerged far stronger from a recession than those that shelved all but essential operations and waited for the recession to pass. And a 2017 study from the U.S. National Bureau of Economic Research shows that a recession can actually accelerate technologi- cal change at organizations. That might be, in part, because project leaders are taking advantage of lower opportunity costs during economic dips to greenlight IT initiatives.

Retail giant Target is a case in point: During the 2000 recession and its lingering fallout, the company completed projects to build nearly 250 new stores, launched initiatives to expand into new

Is a global recession looming?

“Understanding how to do more with less ... is a real challenge. But it’s not impossible.” —Sarah Devine, Few, New York, New York, USA

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fewer team hours—it’s imperative to take the time upfront to thoroughly analyze the project charter, says Malong Dong, PMP, portfolio manager, Insur- ance Australia Group, Sydney, Australia.

“Before rushing into project execution, analyze the scope, time frame and resourcing,” he says. “Spending that time in the beginning helps priori- tize project deliverables and align project objec- tives with the sponsor so you can better plan how to overcome the challenge of budget constraint.”

Pulling lessons learned from similarly scoped ini- tiatives in the organization’s past can shed light on how deeply the budget has been cut or constricted. Does the tighter budget correlate with a scaled-back scope? Has the team been resourced dramatically differently? Are there certain elements, such as external vendors or a lengthier schedule, that might also come into play?

merchandise segments and invested in supply chain efficiencies. Over the course of the recession, those projects and programs helped elevate sales by 40 percent and profits by 50 percent, according to a Harvard Business Review analysis.

But project managers tasked with delivering suc- cessful initiatives during lean economic times could find that they’re managing smaller budgets than similar projects might have commanded in the past. “Understanding how to do more with less—and make a tighter-than-usual budget work—is a real challenge,” says Sarah Devine, director of projects for the tech agency Few, New York, New York, USA. “But it’s not impossible.”

START SLOW While it may feel like the clock is ticking to get started—especially if that leaner budget is based on

Over the course of the recession, Target’s projects and programs helped elevate sales by 40% and profits by 50%. Source: Harvard Business Review analysis

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if they had jumped directly into execution with a vague plan. And it freed up more of the tight budget for tailoring the app’s functionality, positioning the team to not only meet but exceed the client’s origi- nal business goals.

TEAM TRANSPARENCY Sharing exact budget details with every team mem- ber might not be necessary—or even appropriate. But it’s worthwhile to signal that an initiative with greater budget constraints isn’t going to be business as usual, says Ms. Devine, so the team understands that meeting the intended targets might require some creative planning, extra hours or tweaks to the typical processes.

Be prepared, too, that a smaller budget can some- times trigger disappointment among team members, says Franciscus Suryana, PMP, an IT project man- ager for engineering firm Aurecon, Melbourne, Aus- tralia. “They may not be able to design and build the solutions they want,” he says. “But there’s an oppor- tunity for the project manager to position the smaller

An arbitrarily condensed project budget com- pared with standard projects can signal disaster down the road. But a frank conversation with the sponsor should reveal the reasoning and expecta- tions behind the budget, says Mr. Dong.

That was the case at Few, where Ms. Devine man- aged a custom-built app project for a client with an unconventionally small project budget. Rather than spur the team directly into the app’s development to save money, she made sure the planning phase wasn’t given short shrift.

“The team had two months of exploration,” says Ms. Devine. “The primary stakeholder on the client side came in for meetings with our head designer to talk about functionality, map out wireframes and really sketch out exactly what they wanted.”

Investing in that level of planning quickly yielded cost savings when the team flagged existing func- tionality from a third-party service that could be leveraged as the foundation for the custom app. The team could then skip directly to the customization phase, shaving more time off the total schedule than

“There’s an opportunity

for the project manager to position the

smaller budget as a potential

gold mine of creativity for

the team.” —Franciscus Suryana, PMP,

Aurecon, Melbourne, Australia

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budget as a potential gold mine of creativity for the team.” Can the team deliver the usual solutions in a new way? Are there new delivery approaches that might prove more cost-effective? “Let them know this can be their chance to trigger innovative think- ing instead of delivering the same old solutions in the same old ways,” he says.

To sustain that early team morale, Mr. Suryana makes it a point to celebrate project milestones and commend individual contributions through the project’s execution phase. Even small birthday celebrations can help fuel engagement—and team momentum. “It shows that the project manager cares about the team, regardless of project budget,” he says.

PRIORITIZE RISK Overruns can be lethal to a smaller budget, says Thais Villela, senior tech project manager, interac- tive agency BFerraz, São Paulo, Brazil. And that’s particularly true if the portfolio also has lower con- tingency funds than usual to cushion any overage or realized risk.

Sponsor involvement is crucial on any project, but tighter budgets mean being especially mindful not to gloss over cost estimates and risk registers, says Mr. Dong. How early does the sponsor want to be alerted to cost overruns? What communication style will best engage him or her throughout the initiative? Are there any risks that, if realized, should trigger an automatic escalation? To avoid surprises and maintain alignment, Ms. Villela recommends frequent touch points with the sponsor. “Especially on tight-budget projects, touch base with updates at every possible step,” she says.

Those regular updates should also span risks, says Mr. Dong. “When working with a tighter budget, project managers have to pay extra attention to tracking project spend and forecasting in order to reduce the risk of budget overrun. But any con- versation about overruns should include overrun mitigation plans,” he says. In his experience, a one- page summary of the project’s current and forecast financials is a worthwhile tool to incorporate into any meeting with the project sponsor. PM

Thais Villela, senior tech project manager, BFerraz, São Paulo, Brazil, shares insights on how to adjust to a tighter budget when project work is already underway.

Review what the team has already done. That’s the only way to get a firm handle on what can and can’t be reduced to still deliver the mini- mum viable product, she says.

Lay out the scenarios. When meeting with the project sponsor, come prepared with a few possible scenarios. That makes it easier to concretely analyze the best path forward.

Focus on alignment. Remember: Scope, budget and schedule don’t matter much if the completed project isn’t aligned with the strategic goals of the organization or the client. Sometimes, that means the more stra- tegic move in the face of deep budget cuts is to shelve the initia- tive rather than plow forward. But if the adjusted project plan can proceed, priori- tize work-in-progress check-ins, she says, to ensure alignment every step of the way.

Funding Interrupted

“Project managers have to pay extra attention to tracking project spend and forecasting.” —Malong Dong, PMP, Insurance Australia Group, Sydney, Australia

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