How can executives reduce operating costs? Cancel HR and Finance Departments!

How can executives reduce operating costs?

Cancel HR and Finance Departments!

While they are at it – why not cancel marketing and sales along the way?

Are we serious?

Yes, and No:)

Now that we have, you are attention, read on!

Most organizations, today, work projects, internal projects, or as services to clients.

  • Internal projects, could be process improvement, marketing campaigns, training programs, strategic plans … and the list can go on to cover all sorts of projects.
  • If your organization is a service provider, then in addition to your internal projects, you are providing services to clients, these services could be consulting, ICT (Information and Communication Technology), engineering, or once again, a variety of other services.

With the above in minds, who manage these projects?

In some situations, especially for large or complex projects, we could have professional project managers leading these projects. However, in most situations, senior managers and executives take the chance on accidental project managers to manage these projects[1].

In earlier articles, we highlighted the risks (threats) of such approach and today we address the same scenario but from a different angle. The main threat (of extensively depending on professionals who are not qualified or trained in project management) is less than optimal outcome of the projects. Meaning, in these situations they could be delivering failed or challenged projects; assuming anyone notices.

What do we mean by “assuming anyone notices”?

Well, here is one scenario.

When you have someone, who has never managed a project before or even led a team, and this person is not trained in project management, then how does this person manage the project?

By common sense, of course!

Ah – the wonders of common sense!

Common sense is important in project management but never enough.

So what happen? This “project manager”, most likely, does not know how plan a project, including concepts like proper scope definition and control, estimating time and cost, establishing quality requirement, managing stakeholders, or performing proper risk analysis.

The result is that we end up doing the work rather than managing the project.

Such a situation will lead to failed projects, challenged projects, or best case, less than optimal outcome.

Why?

Well if there is no proper plan,

  • How do we know that a project might require 200 or 5000 hours of effort?
  • How do we know whether we spent 400 hours or 500 hours for something that could have been done in 100 hour?
  • How do we know that a project may only need 2 months but takes 3, 4, or 10 months?
  • How do we identify and assess risks so we do not deal with them later as incidents or issues?
  • How do we avoid scope creep and undocumented changes?

“You must be exaggerating” some might be saying just now.

Are we exaggerating?

In some situations maybe – but does not these words ring some truths into what happen in the real world today?

Back to canceling HR of Finance

Why do we need HR? To hire, recruit, train, and manage more resources than we need because we are working projects in less than optimal way?

Why do we need finance if they cannot count the losses or opportunity costs of less than optimal projects or failed projects?

Of course, what we are trying to say here is not to criticize HR, Finance, Marketing, or any other core function within an organization. These departments are not accountable for how an organization manages its projects but we use this analogy to make a point. Here is a key word for you – CORE! If these functions are core functions then why not project management?

How can some organizations accept to spend a large – significant – part of their budgets on projects, and the resources required for projects, without having professional (or at least trained) project managers leading these projects, whereas they insist on having functions for marketing, sales, human resources, IT, and others? Please note we are not talking about certifying project managers or every project lead must be an expert project management resource. What we are advocating is at least basic level of project management expertise.

Closing Comments

Project Management for the Accidental Project Manager

Project Management for the Accidental Project Manager (Free eBook)

One time my colleague was chatting with an executive from and oil and gas company. The executive was explaining how they have outsourced numerous functions. My colleague was excited – maybe there is an opportunity for us to lend a contract to manage their projects. My colleague asked the executive “how about project management are you outsourcing?” The executive responded “absolutely not – project management is a core function for us”! This is an organization that have outsourced many other functions but not project management!

I close with:

I have a dream, maybe one day before I pass, we will see project management as a core function in organizations. Organizations can use the savings for more projects, alleviate hunger, be more sustainable, or world peace, or just pay higher salaries:) 

One can dream – Enjoy!



[1] Refer to our earlier articles on the accidental project manager concept.