Thursday, May 17, 2018

Gambling on Projects


Originally Published May 14, 2018 on LinkedIn
When most people hear the name Monte Carlo, they think of casinos, gambling, secret agents (James Bond), and royalty. For project managers, however, Monte Carlo is all about a mathematical simulation used to to get estimates for the completion of project tasks, and estimate probabilities in the face of uncertainty.
Monte Carlo simulation leverages principle of the law of large numbers to improve the strength of what amounts to a guess. Applying known constraints, or limits, and averaging results across many scenarios allows a project manager to use a Monte Carlo simulation to get numbers which are very likely to be close to what will actually happen.
TechTarget.com defines the law of large numbers as, "given enough trials or instances. As the number of experiments increases, the actual ratio of outcomes will converge on the theoretical, or expected, ratio of outcomes."
So, a lot of runs gets us closer to the most probable actual results. 
In project management, the Monte Carlo simulation is one way a PM can use to predict the probable duration of a given task, when the actual time (or effort) needed is not known.  
For most projects, using this sophisticated approach is overkill. Most often using a weighted average of estimates provided by experts is a very fast, practical and accurate means.  
The weighted average is based on the best-case, (Be) worst-case (We), and probable-case (Pe) estimates provided directly from subject matter experts (SMEs) who will be actually performing the work and who have performed similar work in the past. This produces a task duration (or effort) (D or E), which, I have found, is highly likely to be meet or exceed the actual duration.
D=(Be+4∗Pe+We)÷6
This approach works because the uncertainty is reduced dramatically by the experience of the SMEs. If they have not actually performed the same sort of work, then you may be better off using their Be and We as upper and lower bounds for a Monte Carlo analysis because, in that case, the experts and the computer both have the same amount of actual experience, but the computer can run many iterations and give you a more statistically probable answer.
About the Author: Tom Sheppard specializes in managing large ($10mm+), high-risk, high-profile projects for the US financial services sector. He is the author of The Art of Project Management, available in hardback from Barnes and Noble, or in paperback and ebook format from Amazon
(c) Copyright 2018 Thomas K Sheppard. May be used with attribution.

Friday, July 21, 2017

Project Management Art versus Science

When a potential employer goes looking to hire a project manager, they understandably go looking for someone with a professional certification or degree in the subject.  Usually they also have some stated number of years of experience they are also requiring.  These are the beginnings of problems when hiring a project manager.

When a would-be project manager earns a professional certificate or degree in project management, they go after their project management job feeling fully qualified and ready to take on all challenges.  Unfortunately, the science of project management is the foundation for becoming a skillful project manager.  It is not the whole building.

When a potential employer sees a professional certificate or degree, they assume a certain level of knowledge and ability is present.  My experience is that the assumed knowledge and ability is usually far more than what is actually conferred with a professional certificate or degree.

The world of instruction and education for project managers focuses almost exclusively on the sciences of project management.  While that is necessary and good, it is also misleading.

Having earned both a certificate as a "Project Management Professional" and a Masters of Science in Project Management, as well as having a couple of decades of experience as a professional in this field, I can speak to this with first-hand experience.

Degree and certification programs do a pretty good job of teaching the mechanics, the sciences of project management.  This includes some of the more difficult topics such as estimating, contracting, critical path management, evaluation, key metrics, scheduling, resource loading, documenting, gating from one project phase to another, etc.  In addition, they often dive deep into specific project management approaches such as Agile, Six-Sigma, Lean and others.

If the pupil learns well and applies what they have been taught in these programs s/he can become a very good project technician.  They can use those skills and knowledge to make the paper side of the project move smoothly.  However, when it comes to dealing with the people who make a project move (or not), science no longer holds sway.  Now comes the project management artist.

Influencing, negotiating, communicating effectively, managing expectations, building high-performing teams, overcoming objections, managing change and motivating others are skills which are not easily measured in the classroom or on written tests.  The principles can be taught and communicated, but the effective application of these principles, in the right doses and timing depends upon both the situation, the good judgment and skill of the skillful project manager.

Most project managers don't manage projects with multi-million dollar budgets.  Because of that, they seldom encounter the situations where they must perform skillfully and effectively at this higher level or find themselves on the street.  This lack of challenge means that most project managers are utterly unprepared to perform at that level.  When they find themselves in that situation, the majority of them go down in flames, and the project along with them.

I have succeeded at that level as a project manager and I have a proven track record of hiring project managers who succeed at that level.

If you want to learn the Art of Project Management, you can learn from me.  I am not offering a coaching or mentoring program.  I have distilled my learning into a book, which will be available soon.  Until then, you will search in vain to find it anywhere else.  I know, I searched for books on the art of project management and came up empty.  Even the ones that claimed to be on the art of being a PM were actually focused on the science.

About the Author

Tom Sheppard specializes in managing large ($10mm+), high risk, high profile financial services projects.  He has more than 20 years of project management experience, most of it with the top banks in the United States.  He is the author of The Art of Project Management.

He holds a Masters of Science in Project Management from Western Carolina University, a Masters of Science in Management Human Resources from National-Louis University, a Bachelors of Science in Computer Science and Management Information Systems from Park University, and for six years held a PMP certification with the Project Management Institute.

He has been a computer programmer, systems analyst, manager, and project manager.  In addition he has run his own business and is the author of several books and blogs.

You can see Tom's LinkedIn profile here: http://www.linkedin.com/in/tsheppard

Gambling on Projects

Originally Published May 14, 2018 on LinkedIn When most people hear the name  Monte Carlo , they think of casinos, gambling, secret agen...