Project Management for Professionals - Introduction

Project management is all about the effective management of projects, sets of discrete activities intended to achieve discrete ends.

Most people think about projects in terms of major tasks. In fact, all jobs can be broken into projects by grouping related activities against desired ends.This means that project management techniques can be applied at all levels in organisations to improve performance.

This new series of posts describes our approach to project management. They are not intended to be definitive, but to provide a guide to effective project implementation

All professiomals stand or fall by our ability to meet client need. If successful, we will get further work from that client or through his/her contact network. If we fail, the reverse holds true.

Project management is all about the effective management of projects, sets of discrete activities intended to achieve discrete ends.

Most people think about projects in terms of major tasks. In fact, all jobs can be broken into projects by grouping related activities against desired ends.

This means that project management techniques can be applied at all levels in organisations to improve performance. It is not sufficient, however, just to meet client need.

Our profitability depends upon payments for our time, upon payments for our intellectual property and upon recovery of disbursements. So we must not only meet client need, but also do it in the most cost effective way possible.

We also need to ensure that we capture all the lessons and intellectual property belonging to us generated by the project. Effective project management of individual assignments is critical if we are to achieve these various objectives.

However, the importance of good project management does not end here. In practice, all activities can be turned into projects by grouping related activities against desired ends. In turn, this allows project management approaches to be used at all levels in all organisations to improve performance.

Against this background, these posts will provide a step by step approach to the adoption of simple project management techniques.

Note on Copyright

Material in this series is drawn from the Ndarala Group Short Guide to Project Management. The material is copyright Ndarala but may be reproduced and quoted with due acknowledgment.

Management Trends

At present Australia, and many other parts of the world, are transfixed by what used to be called leveraged buy-outs.

From our viewpoint, such activities do pose significant performance risks that may affect the future, even the very survival, of the target. However, there was an interesting article here in Fortune presenting a counter viewpoint.

In essence, the burdens imposed on public companies by compliance costs and short term performance requirements have become such that you can make a profit simply by taking the company outside the system. Makes one think!

Getting value from your web site - Dilanchian case study

Graphic from Striking gold with kiwifruit, story from the Dilanchian web site

One of the messages that we try to get across to Ndarala members is the important role that a web site can play in promoting their expertise to a broader marketplace.

We are not talking here about revenue from advertising or from e-commerce sales through the site, although some people do make a lot of money there, rather the use of the site to support ordinary professional activities.

Ndarala member practice Dilanchian Lawyers & Consultants (Sydney) provides an interesting case study here.

Dilanchian bills itself as intellectual property & innovation professionals. The firm competes against some of the biggest firms in the country, working in a marketplace where clients often equate size with substance.

To compete, the message Dilanchian wants to get across is the way the firm combines expertise with modern approaches - Noric sometimes uses the word funky to define the message. The web site is a key marketing tool.

When you look at the site you will see that it has clean lines, a modern feel. It also incorporates a blog.

Since their new site went on line a couple of months ago, Noric and his team have focused on building content. This has started to attract real attention with, as an example, their story on Kiwi fruit featuring (among other places) in the latest WIPO SME newsletter. They are also attracting a small but steady stream of new clients through the site.

Institutional and Process Issues in Science Commercialisation

Note to readers: This Ndarala staff paper briefly reviews some of the institutional and process issues associated with the commercialisation of scientific research. Our aim is to encourage debate in an area of great importance to institutions, industry and government.

When some of us first became involved in science commercialisation more than twenty years ago, a core concern was the need to bring universities and other scientific research bodies more effectively into the commercialisation process, to break them out of the academic ghetto.

While this is still important, we now have concerns that the focus on commercialisation and the associated search for commercial funding has become too great and may in fact be distorting our academic structures.

Universities' Multiple Objectives

By their nature, universities have to meet multiple objectives in terms of teaching, research and the pursuit of knowledge. Their role is not just to teach skills, but to disseminate knowledge and encourage thought. Many of the greatest advances in practical knowledge have come, often by serendipity, as a consequence of intellectual curiosity and the pursuit of knowledge for its own sake.

The disciplines and rigours of applied research and development carried out within bounds set by commercial objectives and non-disclosure agreements can be quite antipathetic to these traditional academic objectives. The problem is most acute in some very successful departments where most postgraduate students, together with a significant proportion of staff, are in fact funded to do commercially oriented research.

The outcomes here can include:

• Reduction in the quantum of curiosity inspired research, leading ultimately to a reduction in the knowledge available for real commercialisation. This skew can be reinforced by the attraction of the best students away from pure into applied science.
• Reduction in the spread of knowledge as more science becomes tied up by patents or by non-disclosure agreements especially in the pre-patent phase. The effects of this at international conferences already appear to be significant.
• Reduced career opportunities for students. This comes in part about because the traditional ways of measuring performance (theses, articles, conference papers etc) through exposure to scientific colleagues become less available, in part because of a narrowing of student focus that can then restrict subsequent job opportunities.

One side-effect of the decline in the traditional way of measuring performance is an increased emphasis on patents as a substitute for papers or articles. This has its own problems. Among other things, it can create an incentive for over-patenting.

In our view, resolution of these difficulties requires action at three levels.

At government level, there needs to be at least some focus on the provision of funding for scientific research and scholarship independent of commercial or commercialisation considerations.

At institutional level, we believe that there should be more focus on achieving balance between:

• Traditional academic teaching and research
• Tied research where the funding is provided in a way that is essentially fee for service
  Independent internal research carried out in the hope of prospective commercialisation

At firm level, we believe that firms acquiring technology from or utilising university departments to develop or test technology should be prepared to consciously consider allowing the students and academics involved to write and speak about their work within the constraints set by necessary confidentiality.

Industry can be its own worst enemy here in that an over-obsessive emphasis on secrecy can in fact reduce the incentive for scientific students and staff to participate pro-actively in the targeted development of the technology.

A thought through policy on disclosure can benefit both sides.

Overcoming Complex Institutional Structures

The institutional structures involved in the commercialisation of science can be quite complex involving a number of parties:

• Students: Many scientific discoveries/projects involve students at honours or postgraduate levels working on different aspects of the problem. This can give rise to a number of problems including issues associated with the marking of theses and ownership of resulting IP. Failure to properly address these issues can and has resulted in subsequent commercial problems.
• Staff: Staff can be involved in research as part of their normal work paid for by the institution out of institution funds or from funds contributed to the institution by a commercial firm or some combination of the two. Staff may also work direct for a commercial firm within rules set by the institution. Again there is ample scope for confusion over IP issues.
• Institution commercialisation companies: Most universities have commercial arms that coordinate university resources to deliver commercial services and which may play a lead role in commercialisation on behalf of the University. The relationships between these bodies and other parts of the system can be complex and confusing.
• Institutions, including universities and CRCs. The CRCs themselves are usually consortia with links back into both commercial parties and universities. Each institution has its own policies and costing arrangements in regard to both the supply of services and science/technology commercialisation.

This complex mix can create major difficulties including slow and sometimes opaque decision processes, conflicts in expectations, unrealistic expectations and failure to properly protect IP.
There is no magic bullet that will suddenly solve these difficulties. However, they can be eased to some degree through the creation of protocols and processes within institutions to clarify and support the commercialisation process.

In saying this, we recognise that most if not all institutions now have established policies and procedures intended to support the commercialisation process. The problem from our perspective is that many of these appear to focus on governing rather than facilitating the process.

In our view, both institutions and industry would benefit from action to simplify and clarify institutional policies and procedures. There would also appear to be a case for more cooperation and information exchange between institutions on the process side, facilitating the creation of common templates and process documentation.

Managing Cultural Issues

Commercialisation approaches also need to take into account potential cultural clashes.

Effective commercialisation requires targeted research carried out against sometimes tight deadlines. Individual lines of research may need to be dropped, new lines started. As the research moves into the industrial test phase, an increasing proportion of researcher time needs to be spent supporting the mechanics, reducing real research time.

These requirements can conflict with the universities' own unique cultures and structures. Problems can include:

• Clashes between the academic curiosity that gave rise to the discovery in the first place and the need to devote an increasing proportion of time to the more mundane mechanics. This can be compounded by an unwillingness to give up pet topics and lines of research.
• Clashes between the way performance is measured and objectives set within the institution at personal, departmental and institutional level and project requirements.
  Differences in time perspectives between university and commercial approaches. These differences can be compounded by institutional and industrial structures relating to the employment of staff. This may create problems, for example, if long working hours are required to make something work.
• Divided reporting lines. For example, researchers may have a direct report to the head of the Department, dotted line report to the commercial partner, giving rise to project management problems.

These difficulties may be minimised by moving the research out of the university at an early stage. However, this is not always possible, nor is it necessarily desirable from a university perspective since it can reduce the benefits that might otherwise be achieved.

In our view, the problem is best managed through proper definition up front of the management arrangements to be applied to the commercialisation project.

Note on copyright:

This staff paper is copyright. It may be copied or quoted with due acknowledgment.

Global Changes in Public Administration

A number of Ndarala professionals have worked in or with Government at senior levels. Our people have worked as senior public servants, as ministerial advisers, as consultants to Government, as advisers to those dealing with Government. As part of this work, we have been monitoring global changes in public administration for a number of years.

Why is this important? There has been a global revolution in public administration since the 1970s. Some elements of this are good, others not so.

I have been pursuing some of these issues on my personal blog, drawing both on my own experience and work done by others within Ndarala. The views expressed are personal and to a degree partisan in that my interpretation is influenced by my own views and experiences. However, they may be of interest in explaining change.

The key posts are:

• Changes in Public Administration - Notes. This post looks at the decline of the welfare state and the rise of alternative views.
• Publish or Perish - where did the this phrase come from? This post look at the rise of citation indexes as an example of the interest in measurement that forms a key element of modern approaches.
• Changes in Public Administration - the New Zealand Model. This post looks at the approach adopted in New Zealand as an example of modern approaches.
• NSW Ten Year Plan - praiseworthy but flawed reviews a current example of planning approaches.

Hints for Service Level Agreements

"If you're not measuring it, you cannot manage it."
This article, prepared by Noric Dilanchian (Managing Partner Dilanchian Lawyers & Consultants Sydney), discusses the way in which modern service level agreements reflect fundamental changes in the way we do business.Noric can be contacted at noricd@dilanchian.com.au or visit www.dilanchian.com.au

Traditionally trade in commodities and products dominated legal relations in commerce. Trading relationships were relatively simple. Typically customers bought things and then looked after their support, servicing or maintenance. ﾠFor these tasks there were more people in trades to fix things that broke.

It was often said that the best contract was one that was filed away after signature. That era is long gone. The act of "buying" now involves contracts which:

• relate more often to services than things (ie products or commodities)
• often involve linked transactions - for products, services and support
• document ongoing legal relationships - not one off trades between suppliers and their customers.

This contemporary configuration exists in major contractual relationships between information technology suppliers and their customers for software, phone, hosting and Internet connection offerings. It is also common in other sectors.

The change from seller-buyer to symbiotic legal relationships has been driven by new or evolving technical, commercial, management and societal needs. In the legal arena this has increased demand for legal relationships which are customised, networked, collaborative or innovative. In turn, this has seen increasing use over recent decades of:

• partnering
• joint ventures
• strategic alliances
• outsourcing
• collaborations.

Role of Service Level Agreements

A central feature of these relationships is the need for contracts to provide for practical considerations for service delivery and reciprocity between the parties. For that reason, service level agreements are a common element in mostﾠof the new organisational and legal forms.

All buyers and sellers can benefit from the types of clauses and schedules put into service level agreements. It is a myth that service level agreement features are exclusive to the IT, telecommunications and utility sectors.

Developing the Service Level Agreement

Setting a service level is about defining standards and quality and ultimately price and value. This is of course relevant to all contracts. However traditionally in contracts a lot was left to common sense. That was OK when the focus was on trade in things, in one-off deals, for standard offerings. It is not OK for modern commerce given its dependency on "essential services" or requiring customisation, servicing, consultancy and ongoing support.

What is the service level agreement solution to this need? Nowadays service level agreements commonly set out provisions for:

• service definition
• timing standards
• minimum and maximum quality needs
• compliance with set standards
  payment (incentives and rebates)
• consequences for performance drops
  current and future needs
• monitoring methods
• security of premises and information
• alternative dispute resolution; and variation of arrangements.

In service level agreements for the IT, telecoms and utility sectors, minimum performance standards can define the maximum percentage of downtime including during peak usage times, response times, the form of measurement, transaction volume, and the number of concurrent users.

To ensure legal remedies will be available, it is vital to prepare for and clearly state the consequences of performance shortfalls. It is also common sense to resolve issues before signature, and to deal with them before they become problems or litigation fodder.

For vendors and customers, flexibility for variations is achieved by providing for regular reviews, factors which must trigger costs variations, and compliance with changing market and technical standards and business-specific needs, processes and technology.

For customers, good service level agreements also include both remedies and penalties for missing set service levels. These penalties need to motivate the vendor to achieve customer objectives. Customers don't want to miss service levels over and over again.

Writing the customer's business objectives or goals into a service level agreement can be useful. To minimise third-party performance risks, it may be sensible for a customer to insert a clause stipulating that the primary vendor (ie prime contractor) remains accountable for shortfalls caused by third-party partners.

These are among the many ways of using the law to achieve better, faster and cheaper outcomes. ﾠService level agreements, or service level clauses in contacts, are tools which can benefit buyers and sellers providing "win-win" outcomes.

Note on Copyright:

This article is copyright Dilanchian but can be copied or quoted with due acknowledgement.

Preparing for a Business Sale or Collaboration

Owners want to sell for the right price. Buyers, licensees and collaborators want to buy, fully-informed. Here are four tasks to achieve a meeting of minds.
Noric Dilanchian, Managing Partner, Dilanchian Lawyers & Consultants, Sydney. Noric can be contacted at noricd@dilanchian.com.au or visit www.dilanchian.com.au.


In our work with clients we look for ways to improve results. We know from experience that clients who succeed in selling or collaborating, prepare for that eventuality.

Our research shows that four preparatory tasks help achieve great results.

The four tasks reduce the fear, uncertainty and doubt ("FUD") arising from the fact that a business is not a physical thing. Rather, it is a bundle of abstract concepts.

Of course, most businesses have tangible elements like a business name, brand, products, as well as people, systems and a leased location .

But the intangibles of a business require definition:

• its operating legal structure which has clear financial and tax consequences
• its accounts with line items which may be under-documented
• customs and traditions honoured but not recorded
• services, contracts, and terms and conditions for customers and suppliers, which are rarely fully written
• its undocumented innovation methods that help save it from extinction

It's vital that the managers and owner of a business define this bundle of concepts before beginning transactions towards selling or collaborating.

This article is about how to make these transactions successful and smoother.

Task One: Effective Communication

First, astute clients communicate the nature and depth of proposed business opportunities to prospective buyers, collaborators and their advisers.

To this end, prepare an information memorandum or similar profile document which acts as a hook to draw a response from a prospective buyer or collaborator.

Without it, a business spends time and money giving prospective buyers and collaborators ad hoc information on demand. Supplying information only on demand may sometimes save costs. But this approach exposes transactions to FUD, adds stress to negotiations, erodes trust and increases the likelihood of oversights. A buyer who wants basic data will be surprised by a delay in its supply and may perceive the delay as a weakness. FUD thrives when positive information is absent.

Remember that presenting information graphically can be very effective. Prospective buyers and collaborators will appreciate a chart or diagram illustrating your business or proposal.

Consider creating an organisation chart, a business process map, a value chain diagram on your business model, and a diagram of your IT network typology.

Spreadsheet information is also useful. Consider preparing a break-even analysis, product development budget, and a historical statement of revenue and cost of sales.

Contact Dilanchian for templates for any of these. They aim to communicate how smoothly and efficiently others can merge or align their operations with yours.

Task Two: Build the Quality of Your Assets

Second, clever clients build the quality of assets.

This often involves improving the business's legal and intellectual property law protection. An intellectual property audit will analyse and document positions under copyright, trade mark, confidential information, designs and patent law.

If intellectual property protection or intellectual capital documentation is weak, a buyer or collaborator will lose confidence in your proposal. Once they or their advisers find gaps in your protection, FUD will grow and the deal may slip away.

Leases are a common problem area. When selling a business, a lease may be easily transferable to the buyer. However, you may have lease weaknesses to fix. These could include unresolved maintenance problems, an approaching lease expiry date, high rent or restrictions on using the premises for new purposes.

To compensate for these and other perceived weaknesses, the buyer may want a fee discount or legal fall-backs such as tougher warranties and indemnities, and even pre-defined liquidated damages obligations, guarantees and company charges. Build the quality of your assets by paying attention to these matters and you avoid or minimise the financial and legal consequences.

Task Three: Work on Deal and Transaction Structuring

Third, our clients do better if they work on deal and transaction structuring before starting negotiations.

This puts them in control of negotiations. They get to shape negotiation game play and define and draft effective terms and conditions.

It's an advantage to be the negotiator who controls the deal-making and its document preparation process. Contact your adviser to structure your transaction before negotiations begin.

How do you manoeuvre to secure a better price? One way is to present financial circumstances positively. For example, if your projected recurring revenue is from recently-signed customer contracts, prepare a forecast cash flow projection. If a disclaimer or rider is needed, supply the forecast as a best endeavours estimate, not a warranty as to definite future revenues.

Think creatively, ask questions and use your contacts.ﾠIf you want to sell your business, think about buyers you might have overlooked. Email your brains trust, pose questions, hire a business broker or commission a report from a specialist consultant to identify prices and likely buyers. Sometimes buyers come from outside your pool of competitors. There may be recent entrants in the market unaware of your proposal.

Another way to create value is to remember that it's your team of people that create your intellectual property, not machines. Astute clients build the morale of their people and ensure their contracts and arrangements are attractive to prospective buyers and collaborators.

eview and properly document commission schemes, update contracts, if necessary, and remove irrelevant key performance indicators for your people.

In setting the sale price of a business, industry conventions or ratios play a part. These norms can limit your price, break away by:

• highlighting cost-reduction possibilities - list any volume discounts, no-fee deal arrangements or fee waivers in place for long-term loyalty
• illustrating how your order processing system is scalable, profitable or above industry norms
• using surveys to prove higher-than-normal customer satisfaction rates
• using customer retention statistics to prove lower-than-normal customer churn rates.

Think of negotiations and transactions as theatre, improvise by all means, but work with a script.

Task Four: Design your Strategy

Fourth, during proposal design, deal-making and negotiations, wise clients perfect outcomes with transaction-specific strategies.

For example, if you're selling, attract more than one bidder before entering serious negotiations with any one bidder and you benefit from competition between them. If you feel uncomfortable doing this, use a representative. To act as your representative a solicitor, accountant or business broker can really make a difference here.

Some structures require special care. A transaction-specific strategy for a non-incorporated joint venture proposal should always involve clearly defined and measurable outcomes for the collaborators. Commission a business planner to work with you in building a business plan for the joint venture. Test the financial plan with your accountant. Build IT to manage the enterprise.

Check contracts for the due date for all payments. The purchase price usually requires a part-payment on exchange of contracts and the balance on completion. Sometimes buyers seek payment by instalment. If this is unavoidable, protect yourself by withholding revenue or delaying the transfer of title to key assets until payment is complete.

Conclusion

To achieve the "meeting of minds" that facilitates legally-binding contracts, you need to communicate well with buyers and collaborators. The four tasks reduce FUD for them by:

• lowering the real and perceived risks of doing business with you and your enterprise
• improving the intellectual property of the business, helping build the monopoly they seek
• creating an easier, turn-key transition with fewer loose ends.

Our research shows that by completing the four preparatory tasks and using an information memorandum, you greatly improve your chances of a successful business sale or collaboration.

Note on Copyright

This article is copyright Dilanchian, but can be copied or quoted with due acknowledgement

Formatting Confusion

Just a note. I switched this blog across to a new format in Beta Blogger only to create considerable internal formatting problems on previous posts.

I will try to fix these up in due course. When I work out how!

Use of Blogs to Support Professional Activities

I find it interesting that there is still resistance among professionals to blogs and the use of blogging as a professional tool.

I now use blogs in two main ways.

At a personal level I have found them a very time effective way of keeping in professional touch. This was very important early this year because I was feeling very stale and isolated, wondering if my own professional competency had gone stale in the face of other pressures.

At the time I started really focusing on blogging I had not fully realized the fundamental change that had already taken place in the blogosphere, the fact that a remarkable number of professionals around the world were using blogs for discussion, as a marketing tool, as a way of promoting their ideas. Further, because they posted so frequently, in many cases 3-5 times per week, there was a currency to their comments making it easy to see trends. In addition, the comment facility on blogs allowed for a degree of response and interaction, making knowledge transfer easier while also building contacts.

Perhaps the most important feature of blogging at this level is the way it acts as a huge information screening device. Most bloggers look round their world for things of interest to them and then include links in their posts. I presently monitor some fifteen key blogs on a daily basis, quickly scanning to look for things of interest. Given average post patterns, this means that I scan up to 12 posts per day, reading some in more detail. The 12 posts will probably contain up to 30 links, of which I will click through on 3-4 and again scan. 30-40 minutes per day keeps me in touch in a way that is simply not possible with either conventional web searches or the print media.

Perhaps it’s not surprising that blogs have taken over as a key information resource for so many professionals. Certainly I no longer feel either stale or isolated. I know that my professional competency still stands up on a global basis, and that’s not a bad thing to know.

The second way that I have been using blogs is the more time consuming one, as a publishing and promotional device. My conclusion is positive, although the lead times involved in getting sufficient content up to attract interest and be credible are substantial, far more than I had expected. You really have to post several times a week to achieve impact. It is also important to post comments on other blogs. One side effect of all this is the establishment of contacts with fellow professionals.

Given these positive experiences, I would strongly encourage all professionals to experiment with blogs and blogging.

Building Local Tourism -a comment

We have now put up two linked stories on this site, both dealing with tourism development. The first story, Building Local Tourism, discusses what is involved in developing tourism. The second, Frustrations of a Tourism Official, sets out the response of a tourism official to the first story. Both stories were first published in 2004 but remain relevant today.

Australia faces particular problems - these are not unique just to this country - in the drift of people to the bigger cities and (in the Australian case) to the coast line. Regional communities are attempting to meet this challenge with varying degrees of success.

A number of Ndarala's Australian professionals are involved with regional and community development. Others work in different fields but live in Regional Australia. So issues relating to regional and community development are of considerable interest within the Group.

All communities are affected by change. Sometimes those changes are so large that they simply overwhelm local ability to cope. More often, local responses are possible. One of our frustrations lies in getting this message across. As an example here, see the short linked story on the Regional Living Australia blog about the failure of regional communities to make best use of the web.