Homeward Bound

My secret to success in creating blog posts is to spend a couple of hours Googling variations of “project management [topic concept],” getting frustrated at the lack of quality articles, giving up for about a day, and browsing reputable news sites for something unrelated. A snazzy-looking article crops up, you read it, and you think, “Hey, this actually is a lot like what we’re learning about in class!” Fire up the ol’ word processor, channel your muse, and hey-presto, you’ve got yourself a topic!

This off-the-wall article I found in my search earlier this month is an unassuming little piece from BBC.com titled “Find it, fix it: solve it like a boss.” The content of the article is about what you’d expect, given the title. You learn about the struggles of a Microsoft executive in bridging a communications gap in his division, and how he concocted a process to right the ship. Some of the things the article shares with the reader include identifying a problem, seeking the optimal solution, planning for multiple outcomes, being ready for failure, making a tough decision, and using processes to find solutions.

Does that sound familiar to anyone?

I’m always fascinated by the things being positioned in media and journals as world-beating concepts. So much of what they come up with seem to be fairly fundamental concepts by MBA standards. I found this article to be no exception, but I thought it was really interesting to realize how interchangeable project management skills are with leadership skills. It was a bit of an Aha moment for me, and I think it might be one for you, too.

I Am A Rock – which is not always a good thing

Over the past couple of weeks, I’ve been paying especially close attention to the lessons taught by our illustrious professor. I mean, don’t get me wrong. The how’s and why’s of creating a project team, defining scope properly, and everything else we’ve learned is so crucial to having a strong project. But me, I like to think about what happens when things go wrong. The timing of this article and recent class content has been very interesting, given something I’m digging into at work.

For those of you who didn’t get a chance to read my original best-seller (M&A and Project Management, check it out at a computer or phone near you today!), one of the things that I’ve come to realize is that my company uses a matrix approach to project management. That’s driven in part by limited resources, in part by the pace of cultural development, and in part by high concentrations of SMEs. As such, the processes used in projects tend to vary, as do the results.

One project that was implemented this year was the adoption of a consolidation of all frozen purchases in the state of California into a hub-and-spoke model, which would service the rest of our continental US warehouse network. You see, shipping frozen products is an expensive and relatively risky endeavor, and when factoring in both the miles and the relatively small PO sizes, a shift to a hub-and-spoke model seems to be quite the layup.

Scarborough Fair(ly well botched)

Unfortunately, the project team was managed in cells and was heavily favored by our supply chain department. This resulted in a project moving all the way to implementation without feedback from critical groups, Pricing being one. The consensus was that general analysis showed the model to be favorable, and we were committing to not impacting our customers’ pricing during the implementation. Because due diligence didn’t take place, the pricing for both the initial inbound POs in California and the transfers to the spoke DCs in the East were never adjusted, driving a six-to-seven-figure variance impact to certain P/L lines. What’s worse, the fact that pricing wasn’t adjusted means that there is the potential to unknowingly pass through some of the variance on the project, which would leave the company with a six-figure hole short-term and some very uncomfortable conversations with our customers long-term.

Had the team taken their time and exploring the possible outcomes, this entire thing could have been managed within the scope of the project and been addressed accordingly. As it is, there is now a fairly real financial exposure, the need to correct the issues in the midst of heavy on-boarding and integration activity, and a fundamental question of whether or not the model will generate the same level of savings as it initially touted. There is no fallback plan in place, and for the moment a fairly uncomfortable shadow hangs over what was supposed to be a prominent accomplishment for the company.

Bridge Over Troubled Water

I stumbled upon this while doing entirely unrelated work last month, and I was able to frame it out in about an hour. If it was that easy for me, it should have been even easier for them to spot. But that’s the kind of stuff you miss when you’re looking to force a project through come hell or high water. Just like the article states, you need to take the time to consider all outcomes and plan for failure. You’ve got to slow it down, then all will be groovy.

So this may be a bit out of scope (did you see what I did there?) of what these posts are going to be, but it makes perfect sense to me, so I’m going to go with it. Buckle up, chochachos!

 

As I mentioned in my class introduction, I work for KeHE Distributors, and I have had the distinct pleasure of serving as a role player on a couple of project teams. In my time at KeHE, I have supported integration efforts on two distinct acquisitions, and (as you might expect) each of the integrations came with a plethora of projects, first focused on merging systems and processes, then on tapping into latent operational efficiencies.

 

I was reminded of this fact when I came across this article in WSJ.com: (http://blogs.wsj.com/moneybeat/2015/06/25/goldman-sachs-predicts-big-uptick-in-ma/?mod=WSJBlog&mod=MarketsMain). In brief, this article talks about the expected growth in M&A activity in the coming years. When I first read this, I didn’t really think that it has any relationship to project management, but the more I thought about it, the more I felt that it was highly relevant.

 

M&A activity is jam-packed full of large- and small-scale projects of many types, and they will very likely require exceptional project management – by which I mean both high-quality and out-of-the-ordinary. In my experience, the success or failure of M&A is directly correlated to how well it can be executed – which ties right into project management!

 

See? I told you we’d get there.

 

Like I said earlier, I’ve been through one acquisition of one company roughly the same size, and am working as a role player on a second integration today. In both integrations, my company used a matrix approach to project management, but these two acquisitions have yielded very different experiences.  The first time around (2009), my company had many antiquated operating procedures and cultural trappings. Said simply, it was a company that sold shy of $1BB/year out of four warehouses and functioned very much like a family business circa 1980s.  We had acquired a company roughly the same size but with a much larger operation trappings (international vs. domestic and 14 warehouses vs. KeHE’s 4) and a fundamentally different approach to data management.

 

On paper, the prospects were great. We thought that we could just combine two companies, taking the best from each, and drive greater growth within 18 months – with few growing pains for anyone involved.  Admittedly, we had lofty goals, but we thought we could do better than the average – which spoke to a little bit of ego. What we didn’t anticipate was a paradigm shift in the market that forced us to fundamentally redefine how we went to market. Two years later, we were hanging on for dear life, hemorrhaging accounts, an irate vendor community, and a disenfranchised employee base. What we learned is that, far from being the cat’s meow, our company fell well short of our lofty expectations, and we were humbled by our shortcomings. The integration should have been a series of carefully choreographed and executed projects, but the scope of the project was overly optimistic and didn’t factor for the unexpected.

 

Fast forward to today, our company is older and wiser for our previous challenges. We recovered well and are on a great growth trajectory, and while this integration is set at a slower pace, what we learned from our mistakes helped us to avoid the mistakes of the past – not least being our failure to factor in risk. We continue to use a matrix approach, but we’re much more deliberate in how we create teams and manage project resources. We plan for multiple contingencies and are able to adapt to the unexpected. This planning has already come into play, as we have to advance a major IT conversion by four weeks to accommodate new business recently awarded to us. Had this happened four years ago, we would have crashed and burned, but the lessons we learned have helped us keep our focus where it needs to be.

 

There’s no doubt that there’s risk associated with M&A activity, but these risks can be mitigated with strong planning and project management. The more effectively the project team, the greater the financial, operational, and strategic return. And, if the Journal has anything to say about it, we’ll be seeing more M&A activity in the future. Who knows? There may be an M&A project in YOUR future!