English1

20 IET Engineering Management | August/September 2006 IET Engineering Management | August/September 2006 21

plan the whole project – the ‘how’ that will deliver the ‘what’ At this stage, the project is formally launched, having established the critical cost/benefit equation. � Execute the project/change event The change event or project is then executed to the plan using a simple process of risk and issue management, reporting and communication. A change management evaluation process ensures that the original scope of work can develop and evolve if the business needs dictate. � Implement the project/change event As the work content of the project is dealt with, attention eventually turns to the implementation and benefit realisation stages. It is here where the transition from the old method to the new method actually takes place, with competent people in post to run the new method. � Complete the project/change event At the end of the project, a sign-off procedure records the fact that the stages of work are complete and that the anticipated benefits have been realised. Finally, a review is carried out as a formal part of continuous improvement.

Ultimately, if the preparation is carried out to the necessary standard, then the change event will be implemented successfully and reliably. While this is a

defined process, it is also highly focused and simplified. Inevitably, the process must be underpinned by the requisite levels of interpersonal and management competency, but the same Pareto Principle applies to the 20% of ‘the vital’ to the ‘soft skills’ defined as follows: getting yourself organised first; creative problem solving; effective delegation; essential communications and reporting; setting up, developing, co- ordinating and running teams; and performance management and continual improvement.

LOOKING FOR THE PROOF? Having implemented the process in a range of organisations from both the private and public sector, I can vouch for the efficacy of the Pareto project management process as one that has been deployed successfully on many occasions to

deliver complex business change. For example, the process was effectively used to deliver

a fundamental sales business model change within a major financial services institution. Of particular importance within this project was the establishment of

remote connectivity services for the field sales consultants (numbering approximately 1200).This involved a complete overhaul of the business critical IT infrastructure, both

hardware and software where careful planning and thorough risk management were of vital importance. The lean change approach, based on the Pareto Principle was used so effectively that the migration to the new functionality was achieved to timescale and within budget, without affecting business as usual.

In a second example, the procedure was deployed at a process manufacturer of fibre cement products in the UK. The scope of work was considerable, including process, condition monitoring and cultural change aspects within the organisation. The objective was to bring about a change from breakdown maintenance through preventative maintenance and finally total productive maintenance – successfully achieved through the application of the 80/20 approach to project management.

Nobody wants to waste time and money and few people would argue with the notion that change should be managed economically, yet in reality this is rarely the case. Ultimately organisations want reliable results, quickly, which can be measured and managed along the way. By applying the Pareto Principle to the art of project and programme management, businesses can be confident that they are focusing on the vital 20% that really makes a difference. �

W ith technology continually advancing and increasing competition from overseas markets, the British engineering industry has had to work hard to keep at the forefront of the global market. It’s small wonder

then, that many who work within the different engineering sectors are experiencing change fatigue. This has serious implications for change management, making it essential to get the process right first time. However, many businesses make the fundamental mistake of over complicating the procedure by pouring money and resources into effecting change, without first identifying where these resources are best targeted. In many cases, a disturbing 80% of the time and effort spent on project management is wasted due to a lack of focus on the crucial 20% that really makes a difference to the results.

The 80/20 rule was first introduced by Vilfredo Pareto (1848-1923), an Italian economist who made the observation that 80% of the wealth in early 20th century Italy belonged to 20% of its people. This 80/20 theory was extended by management analyst Joseph M Juran in the latter half of the 20th century. He believed that the rule could actually be applied to numerous aspects of management. He concluded that 20% of time and effort in business yields 80% of the results – this eventually became known as the ‘Pareto Principle’. So, to make the time spent on a project really count, the rule dictates that you must first identify the crucial 20% and only then will you be effectively managing the elements that really make the difference to your organisation’s productivity and performance.

As the Pareto project management process focuses on the most critical 20%, it is the definitive ‘lean’ approach to change management, but it is effective enough to be able to:

� Set up a project or change event to maximise its success; � Performance manage the project, and those involved in

it; � Motivate and organise others involved in the process; � Develop effective team working; � Effectively communicate to all involved; � Manage risks and issues before they impact on the

change event; � Develop the essential skills to lead and manage others

through the change process.

However, to maximise the efficiency of this ‘lean’ approach, a range of areas need to be considered before the project is instigated. First, is the climate right for change? A simple diagnostic can establish if the organisation’s climate is right for the project or change event to take place. A benchmark to best practice is a useful method of assessing the risk of failure owing to cultural issues or a lack of preparation. The right environment for change is essential.

KEY STAGES The key stages of the Pareto project management process are outlined as follows. � Deploy supportive structures Organise the personnel and roles and responsibilities to ensure that your project/change event is allocated the resources needed. This could take the form of admini- stration support or working parties for example. A supportive personnel structure is a priority fundamental priority. � Establish the objective Be clear about what needs to be done and place the project in a quantifiable business context then seek funding by producing a business case. The next step is to define and

w w

w .th

ei et

.o rg

/m an

ag em

en t

Process improvement

Steve Izzard argues that applying the 80/20 Pareto Principle to project management in engineering will maximise results

Don’t waste your time managing change

Steve Izzard is managing consultant of BML, a change management consultancy based in Leicestershire: www.breakthroughmgt.co.uk. Steve specialises in managing complex change programmes and projects from conception to their commercially successful conclusion.

20 IET Engineering Management | August/September 2006 IET Engineering Management | August/September 2006 21

plan the whole project – the ‘how’ that will deliver the ‘what’ At this stage, the project is formally launched, having established the critical cost/benefit equation. � Execute the project/change event The change event or project is then executed to the plan using a simple process of risk and issue management, reporting and communication. A change management evaluation process ensures that the original scope of work can develop and evolve if the business needs dictate. � Implement the project/change event As the work content of the project is dealt with, attention eventually turns to the implementation and benefit realisation stages. It is here where the transition from the old method to the new method actually takes place, with competent people in post to run the new method. � Complete the project/change event At the end of the project, a sign-off procedure records the fact that the stages of work are complete and that the anticipated benefits have been realised. Finally, a review is carried out as a formal part of continuous improvement.

Ultimately, if the preparation is carried out to the necessary standard, then the change event will be implemented successfully and reliably. While this is a

defined process, it is also highly focused and simplified. Inevitably, the process must be underpinned by the requisite levels of interpersonal and management competency, but the same Pareto Principle applies to the 20% of ‘the vital’ to the ‘soft skills’ defined as follows: getting yourself organised first; creative problem solving; effective delegation; essential communications and reporting; setting up, developing, co- ordinating and running teams; and performance management and continual improvement.

LOOKING FOR THE PROOF? Having implemented the process in a range of organisations from both the private and public sector, I can vouch for the efficacy of the Pareto project management process as one that has been deployed successfully on many occasions to

deliver complex business change. For example, the process was effectively used to deliver

a fundamental sales business model change within a major financial services institution. Of particular importance within this project was the establishment of

remote connectivity services for the field sales consultants (numbering approximately 1200).This involved a complete overhaul of the business critical IT infrastructure, both

hardware and software where careful planning and thorough risk management were of vital importance. The lean change approach, based on the Pareto Principle was used so effectively that the migration to the new functionality was achieved to timescale and within budget, without affecting business as usual.

In a second example, the procedure was deployed at a process manufacturer of fibre cement products in the UK. The scope of work was considerable, including process, condition monitoring and cultural change aspects within the organisation. The objective was to bring about a change from breakdown maintenance through preventative maintenance and finally total productive maintenance – successfully achieved through the application of the 80/20 approach to project management.

Nobody wants to waste time and money and few people would argue with the notion that change should be managed economically, yet in reality this is rarely the case. Ultimately organisations want reliable results, quickly, which can be measured and managed along the way. By applying the Pareto Principle to the art of project and programme management, businesses can be confident that they are focusing on the vital 20% that really makes a difference. �

W ith technology continually advancing and increasing competition from overseas markets, the British engineering industry has had to work hard to keep at the forefront of the global market. It’s small wonder

then, that many who work within the different engineering sectors are experiencing change fatigue. This has serious implications for change management, making it essential to get the process right first time. However, many businesses make the fundamental mistake of over complicating the procedure by pouring money and resources into effecting change, without first identifying where these resources are best targeted. In many cases, a disturbing 80% of the time and effort spent on project management is wasted due to a lack of focus on the crucial 20% that really makes a difference to the results.

The 80/20 rule was first introduced by Vilfredo Pareto (1848-1923), an Italian economist who made the observation that 80% of the wealth in early 20th century Italy belonged to 20% of its people. This 80/20 theory was extended by management analyst Joseph M Juran in the latter half of the 20th century. He believed that the rule could actually be applied to numerous aspects of management. He concluded that 20% of time and effort in business yields 80% of the results – this eventually became known as the ‘Pareto Principle’. So, to make the time spent on a project really count, the rule dictates that you must first identify the crucial 20% and only then will you be effectively managing the elements that really make the difference to your organisation’s productivity and performance.

As the Pareto project management process focuses on the most critical 20%, it is the definitive ‘lean’ approach to change management, but it is effective enough to be able to:

� Set up a project or change event to maximise its success; � Performance manage the project, and those involved in

it; � Motivate and organise others involved in the process; � Develop effective team working; � Effectively communicate to all involved; � Manage risks and issues before they impact on the

change event; � Develop the essential skills to lead and manage others

through the change process.

However, to maximise the efficiency of this ‘lean’ approach, a range of areas need to be considered before the project is instigated. First, is the climate right for change? A simple diagnostic can establish if the organisation’s climate is right for the project or change event to take place. A benchmark to best practice is a useful method of assessing the risk of failure owing to cultural issues or a lack of preparation. The right environment for change is essential.

KEY STAGES The key stages of the Pareto project management process are outlined as follows. � Deploy supportive structures Organise the personnel and roles and responsibilities to ensure that your project/change event is allocated the resources needed. This could take the form of admini- stration support or working parties for example. A supportive personnel structure is a priority fundamental priority. � Establish the objective Be clear about what needs to be done and place the project in a quantifiable business context then seek funding by producing a business case. The next step is to define and

w w

w .th

ei et

.o rg

/m an

ag em

en t

Process improvement

Steve Izzard argues that applying the 80/20 Pareto Principle to project management in engineering will maximise results

Don’t waste your time managing change

Steve Izzard is managing consultant of BML, a change management consultancy based in Leicestershire: www.breakthroughmgt.co.uk. Steve specialises in managing complex change programmes and projects from conception to their commercially successful conclusion.