Scenario Analysis for Management Practitioners with Microsoft Excel (2)

In the earlier part of this post, I had outlined how scenario analysis helps managers to present their cases for the project,under various situations or scenarios. 

During project execution, too, this analysis will be helpful to communicate with the stakeholders based on various situations or scenarios. 

In the earlier part, we saw how to create the scenarios with MS Excel with a quite powerful pack of "What-if analysis". In this part, we will know how to run the scenarios and check the summary of all scenarios in one sheet.

Run the Scenarios
Next, we will run the scenarios by using the “Show” command in the Scenario Manager screen. This command is highlighted in the previous image. 

Select the first scenario of “High Labor Costs” and click on the “Show” command. This, in turn, will update the values of “C5” and “C6” and also the values in “Total” columns. This is shown below and updated ones are highlighted in blue.

As shown above, the labor costs for Phase 1 and Phase 2 have gone up by $200,000 and the total cost for these phases also have gone up. 

Similarly, when you the second scenario of “Low Expenses”, it will come as shown below. 

As you can see, in this case the expenses and hence total costs for all the phases have gone down by $100,000. The updated cells are again highlighted in blue.

Reverting Back to the Original Scenario
Many times, it’s possible you would like to revert back to the original scenario. To do that simply click on the “Undo” command on the Quick Access Toolbar (QAT) of MS Excel tool.

Summary of Scenarios
Another powerful functionality given with MS Excel is the summary of the scenarios you have created. This way you can check for the impact of all the scenarios along with the original values.

The summary report can be generated by running the “Summary…” command in the Scenario Manager screen.  

The summary report informs on the current or original cases, the “High Labor Costs” scenario and its impact, the “Low Expenses” scenario and its impact. For example:

• For Phase 1 and Phase 2, the labor costs were $500,000 and $515,000, respectively. If you apply the scenarios, it will become $700,000 and $715,000, respectively.

• For Phase 1, Phase 2 and Phase 3, the expenses were $275,000, $200,000 and $290,000, respectively. If you apply the scenarios, it will become $175,000, $100,000 and $190,000, respectively.

Final Words
While working as a project manager, it’s likely that you will be asked to check upon various scenarios for your projects. In this case we saw the increase or decrease of cost related items for the project. This can also be for your project schedule, too. MS Excel provides this in-built tool which can help work with various scenarios. 

Scenario analysis is not only needed by project managers, it may also be required if you are working as a portfolio manager or program manager or finance manager. Also, as mentioned earlier, in operational work with inventory, utilities, site related costs, you can be asked to have various scenario analysis.

This series Part - 1: 
Scenario Analysis for Management Practitioners with Microsoft Excel (1)

Scenario Analysis for Management Practitioners with Microsoft Excel (1)

A project is executed in an uncertain environment and many assumptions and constraints are associated while executing a project. Projects (or programs or portfolios), after all, are undertaken by businesses to bring value to the organizations and the stakeholders. 

Why Scenario Analysis?
Before a project is approved and started, many times scenarios are developed for the project to see if the organization can really meet the obligations as demanded by the project. During project execution too, it is possible that scenarios may be developed and analyzed to check if the project should be continued further. 

Let’s take an example.

Say a project has three phases and there will be a number of labor and non-labor resources as well as expenses in the project in all these three phases. Next, let's see some question on these resources (labor, non-labor, others) and associated costs? 

What will happen:

• If the labor cost increases (or decreases) a lot?
• If the resources are not available in one phase and hence it increases the schedule?
• If the expenses are much more (or much reduced) than planned?

Similarly, there can be other questions related to schedule, cost, resources, expectations on quality front etc. All these will impact the objectives of the project, which can be schedule objective, cost objective or scope objective or any other. Do remember that, these scenarios (and hence questions) can be raised even before the project is approved. 

If you are using MS Excel, it’s a good tool to check on these scenarios and find the impact on the associated objectives. This tool comes with the “What-if Analysis” pack, which can be used to create, run, and see the results of as many scenarios as you want. 

While I’ve primarily explained this for project managers, this tool can also be used by portfolio managers, program managers, operation managers, finance managers, among many others. For example, an operation manager would want to check on the scenarios for the inventories in his or her organization. 

We will reuse our first example of a project with three phases and see various scenarios associated with the cost of the project. The example goes as below.

Example Question
In your project, there are three phases – Phase 1 to Phase 3. In each phase, the cost associated with the resources and expenses are noted in the below table. This data is plotted with MS Excel.

• Scenario 1: What will happen if the “Labor Cost” goes by $200,000 for Phase 2 and by $100,000 for Phase 3?

• Scenario 2: What will happen if the “Expenses” are reduced by $100,000 for all phases (i.e., Phase 1, Phase 2 and Phase 3)?

Let’s solve this case. Of course, you can add the sum of all needed cells by changing the values and see the impact one-by-one. But it will be far easier and quicker if you use the scenario analysis tool of MS Excel. It will help you to do a quick comparison among all the scenarios. 

To use this tool, we will follow these steps:

• Create the Scenarios
• Run the Scenarios
• Check the Summary

Create the Scenarios
To create the scenarios, go to the Data tab – Forecast group – Scenario Manager… command.

This in turn will open up the Scenario Manager screen, where we can add/edit/remove the scenarios. 

Next, let’s add our scenarios. We will have the following scenarios. 

• “High Labor Costs” – The labor cost increase scenario.
• For Phase 2 it will be an increment of $200,000 and for Phase 3, it will be $100,000. 

As you create the scenario, it will come as shown below. 

As shown above, our scenario created is “High Labor Costs” and we will be changing the cells “C6” and “C7”. These are as noted in “Changing Cells:”. The cells for “C6” and “C7” are for Phase 1 and Phase 2 labor costs, respectively. This you can cross-check with the first image of this article.

As you press “OK” on the above screen, you will have the following dialog box asking you to enter the needed values for cells “C6” and “C7”. We will change these values. 

• Cell “C6” value is changed from $ 515,000 to $ 715,000. This way we have a cost increment of $200,000.
• Cell “C7” value is changed from $ 655,000 to $ 755,000. This way we have a cost increment of $100,000.

After you change the cell values, it will be shown as depicted below. 

In the screen shown above, we have changed the values for cell “C6” and cell “C7”.  

Similarly, we will add another scenario for “Low Expenses”. For this case, we will change cell “E5”, “E6” and “E7”.  The cells for “E5”, “E6” and “E7” are for Phase 1, Phase 2 and Phase 3 expenses, respectively. You can cross-check this as well with the first image of this post. For the second scenario, we have reduced the expenses for each phase by $100,000. The cells for low expenses scenario is shown below.

After you have added both the scenarios, the Scenario Manager now has two scenarios as depicted in the below figure.

As you can see, there are two scenarios:

• Scenario 1 is for “High Labor Costs”, which impacts cells “C5” and “C6”, representing Phase 1 and Phase 2 labor costs getting increased.
• Scenario 2 is for “Low Expenses”, which impacts cells “E5”, “E6” and “E7”, representing Phase 1, Phase 2 and Phase 3 expenses getting decreased.

The second and concluding part of this post, we will see how to:

1. Run the scenario (just with a click of mouse and respectively fields getting updated)
2. Summary of scenarios, which helps to check all the scenarios along with the original case.

This series Part - 2: 
Scenario Analysis for Management Practitioners with Microsoft Excel (2)

PMP Protein: Understanding Brainstorming

By Vivek Vardhan, PMP

In the earlier article, I wrote about Leadership and Team Building. 

Another, leadership toolkit is brainstorming, which is quick, effective and generates a lot of ideas. In this article, we will see what is brainstorming, in which processes it is used and the possible types that can be used by a project manager. 

Overall, brainstorming work as a technique, which is typically used to generate ideas. As per Project Management Institute (PMI)’s, brainstorming is defined as: 

“A technique that is performed in a group setting and led by a facilitator to engage stakeholders to quickly identify a list of ideas for a specific topic in a relatively short time period.”

PMI also says brainstorming can be used to identify a list of risks or a set of stakeholders or solutions in the PMBOK guide. The main principle of successful brainstorming is that the quality of ideas flowing shall not be assessed at the initial stage. 

Usage of Brainstorming
Brainstorming is one of the tools and techniques which has been used throughout the PMBOK Guide. Let’s check them one by one. 

• Scope Management: For a successful project outcome, it is important to have proper scope defined. A good defined scope depends on collection of creative and relevant ideas. Hence, the important usage of brainstorming happens in Scope Management – specifically in Collect Requirements process. In this process, you can use brainstorming to generate and collect multiple ideas related to both project and product requirements.
• Quality Management: In quality management, you can use brainstorming to develop the Quality Management Plan in Plan Quality Management process. With brainstorming, you can engage with the team members and or subject matter experts to get the best of inputs.
• Risk Management: In my view, the most comprehensive use of brainstorming one can use is risk management, while identifying risks. In the process of Identify Risks, you can use it to get both the individual project risks and overall project risk. This process results in the creation of the Risk Register document.
• Stakeholder Management: Another practical usage of brainstorming is to identify all possible stakeholders in Identify Stakeholders process.  This process results in the creation of the Stakeholder Register document.

Brainstorming can also be used in Integration Management while developing the Project Charter and Project Management Plan.

Things to Take Care 
While brainstorming, you as the project manager, may have to play the role of facilitator. Hence, you need to keep a tab of certain important things while performing this activity.

Since quantity takes dominance over quality, rejection of one idea may lead to failure of the session. Hence, in order to keep the people motivated for sharing, conducive atmosphere be made so that the participants do not shy away or feel ignored. There are no rules for a new thought, let the thoughts flow in, we may find it funny or stupid, but never mind, it can be sorted out later. The success of brainstorming depends on how well the subject of discussion is identified and related problem areas clearly spelt out within the group. Lack of clarity on the topic would lead to unnecessary discussion and waste of energies. 

Types of Brainstorming
To understand brainstorming as subject, following discussion techniques are used to generate creative ideas. Basically, these are various types of brainstorming. 

1. Star Bursting: It focuses on writing set of questions rather than answers, which ensures that all aspects of the project are addressed before any work begins. It is useful in the situation when the project team is rushing to get things done at the last minute. Eventually at the end, good question database helps to get instant answers, which leads to good content in a short time. However, this brainstorming technique is being used mostly to build Frequently Asked Questions (FAQ) section.  
2. Brain Writing: This is a very basic technique and is based on general principle of separate ideas generated from decision. Here you allow the individual participants time to consider the question(s) individually before the group creativity session is held.
3. Figuring Storming: This technique is based on analysis of how someone else might handle the situation. Putting yourself in new shoes can give the team a different perspective, helping them to see the possibilities from fresh ideas. This technique works best in a situation where the team finds itself coming across the same ideas for repetitive projects.
4. Online Brainstorming: This form of brainstorming is a useful technique when the project team is working virtually in isolation. To collect the ideas, an online central repository is created where virtual team members can contribute and work in collaboration. 
5. Rapid Ideation: It’s a useful technique when the project team has a shortage of time. In this technique, Project Manager or team leader provides context, information and questions on the topic along with pre-set timelines to individuals to write down ideas around the topics without considering filtering their ideas. 
6. Round Robin: Brainstorming technique under which project team forms a circle to kick off discussions. Topic of discussion is shared by Project Manager, afterwards turn by turn each team member participates and share his idea. The shared ideas are recorded by a facilitator. In this technique, it is important not to evaluate ideas until everyone gets the opportunity to share. 

To conclude, brainstorming a method of generating ideas to solve problems by involving group of people under the direction of facilitator. 

Written by Vivek Vardhan:

Vivek Vardhan is a Supply Chain Management Professional and has project management exposure of five years. He has overall 21 years of work experience.

References:

[1] Book: Organizational Behavior by Stephen P. Robbins

[2] Project Management Body of Knowledge (PMBOK) Guide, 6th Edition, by Project Management Institute (PMI)

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PMP Protein: Leadership and Team Building

By Vivek Vardhan, PMP

Leadership helps project manager or leaders to influence a group toward the achievement of a vision or set of project goals. It further helps to establish direction by developing a vision of the future goals and targets, align team with project vision through communication and inspire individuals to overcome hurdles. A good leader provides vision and strategy for project and to society. 

As said by a philosopher: 
“It’s not necessary that leaders are formally made; they may arise out of the positions or by virtue of their authority and tasks.”

Further to elaborate, leadership can arise out of one’s personality and traits. Such people are born leaders and take the task of leading groups in whatever they do. Leadership comes naturally to such people. For example, India has umpteen examples of such leaders in various areas like organizational, political, social and religious aspects of life. 


Basic Traits of a Leader

The basic traits of leaders are enumerated below:

• Ambition and Energy: These characteristics are part of extraversion. This is more indicative of leader emergence. However, people who are too assertive in nature are found to be less effective.
• Conscientiousness and openness: Individuals who are disciplined and keep their commitments, are creative and flexible, appear to be in a better place with respect to leadership attributes.
• Agreeableness: This characteristic represents a person who is described as good-natured, co-operative and trusting.
• Empathy: This leadership characteristic is part of emotional intelligence (EI), makes an important component for effective leadership. Leaders who understand and listen to their followers are more followed by others.

Leadership Styles

Leaders apply various leadership style in their work. In order to describe leadership styles, different scholars have cited different leadership styles based on project’s requirements, goals and objectives. One old school of thought propagates for employee-oriented leadership where leader emphasizes on interpersonal relations with employees and production-oriented leader wherein leader emphasizes technical or task aspects of the job.

The common leadership styles are as below:

• Visionary and Authoritative: Using this style, project managers able to divert people toward project vision. This is very effective once project scope is defined and signed off.  
• Coaching: Coaching is used to develop people for the project deliverables. It helps to understand individual’s capabilities and divert it towards project delivery. It is a project manager’s responsibility to understand his team capabilities and utilize it for project delivery. 
• Affiliative: Creation of emotional bonding with-in team is important for project success. It also helps to motivate team to deal with stressful work environment without impacting deliverables and their strength. 
• Democratic: Participation from individual has importance, it is project manager responsibility to build consensus through participation and get maximum output based on individual capability, skill and strength.
• Pacesetting: Attain appropriate and desired outcome from competent team plays a vital role in project success. To achieve this, team individual has to be self-direction, so that by monitoring and shaping their decisions, able to deliver projected results with-in set timelines.
• Commanding/ Coercive: In times, project face crisis or even before reaching to a crisis, it is important to identify critical issues, non-performing individuals, source of negativity and take corrective measures. In this situation coercive leadership style helps to deal with the problem. This style should be applied occasionally depending on situation, otherwise it would lead to negative impact on overall team performance and affect the work environment in a reverse way. 

The Project Management Body of Knowledge (PMBOK®) guide from Project Management Institute (PMI®) has a set of different leadership styles elaborated in its latest edition. In addition to the above styles, you can also those leadership styles such as transactional leadership, servant leadership, charismatic leadership among many others.

Qualities of a Leader
Leadership qualities required for a successful project management and its execution can be understood with the help of following cyclical diagram, which signifies that it is a continuous process and does not end with a task.

The above figure enumerates what is required of a leader on a continuous basis. A leader should be capable of guiding the team in the right direction and influence their behavior to optimally utilize skills and capabilities using relational power. Leader should be able to develop ideas and innovate on strategies to lead the team towards building focus on deliverables. An atmosphere conducive for building of trust be created where the people are inspired to perform and challenge the status quo to scale various organizational aspirations.  Ability of a leader to inspire others to act beyond their self-interest plays a crucial role in determining the success path. All this can be achieved by having a focus on long-range mission and vision by the leader. 

Communication is the crux of all success and failures, if a thought is not communicated in a proper way, it may lead to interpretations and misinterpretations widely affecting the rise and fall of leaders and their leadership skills.

Leadership is the skill which affects a project’s success if not used properly. Strong, ethical leadership is extremely critical for success of a project. Although there are several different leadership styles, only some of the most effective leaders are able to tailor their management practice to suit project requirements.  

One of the key jobs of a leader is to build a successful team. As the project manager, you are the leader of the project. In fact, Project Management Institute (PMI®) defines the project manager as:

“The project manager is the person assigned by the performing organization to lead the team that is responsible for achieving the project objectives.”

Hence, in the concluding part of this piece, let’s see how as the project manager and leader of your project, you can do team building and how in turn it helps your team. 

Team Building
Team building is an important trait of project success. Team Building plays a vital role in successful project delivery by building competent and effective team. It enables and encourages members of a team to work well together. 

However, team building represents action or process, which helps to bring group of people to work together effectivally as a team in order to achieve pre-defined goals, for example, by having them to take part in different activities or games. 

Team building at work place enables better communication; better relationships and ultimately increases team productivity. 

Successful Project managers are best leaders to influence others with their ideas. A good leader deploys their innate qualities to inspire a workforce or a team to achieve goals. 

Team building helps project managers to form efficient team by developing following qualities:

• Responsive and meaningful Communication: Communication is two-way street, discussion based team building activities enables open communication amongst team individuals. Responsive and meaningful communication helps team individuals to understand each other and improve relationship and in turn, improves quality of work done by team. 
• Motivate Team Individual: Motivated team is the key of success for a project. A motivated team works together effectively, problems get flattened out easily and achievements begin to flow apparently. The team who can work together are more efficient and passionate about success. Team building and team development activities helps developing motivated team at work.
• Creativity: Taking the team outside of routine helps exposing them to new experience, which will force them to think out of the box. Working together with other team members can ignite creativity and fresh ideas, which will help them to think and generate creative ideas.      
• Enhance Productivity: By improving existing ways of working, elimination of obstacles helps to enhance productivity of team. Productivity at work place only be guaranteed if team individuals have ability to work together. Team building activities helps to bring individuals together under one roof.  
• Develop a Collaborative work culture: Collaborative work culture is help to lay foundation of fruitful project outcome. Team building activities helps to create collaborative work place and improve team dynamics so that decision-making process is streamlined and problem solving become simpler. 
• Develop Problem Solving Skills: Team building activities that requires co-workers to work together and solve critical problems can improve the ability to think rationally and strategically. If team is able to determine the situation when the problem arises and provide the solution, it can then effectively take charge when a real crisis occurs. 
• Break the barrier: Team building exercises give leadership the opportunity to meet team individuals as colleague rather than as boss, which helps to boost the employee morale and increase trust factor. 
• Interpersonal relations: Team building exercises create strong bond between team individuals; it helps to bring them close to each other which eventually gets converted into a strong interpersonal relationship.

Human beings comprise the most important and critical resource of an organization. It is this resource around which all domains of any organization function. Hence, it is very crucial to ensure synergies and co-ordination within the teams and work force so that all other relevant factors automatically fall in place and desired results are obtained.

Written by Vivek Vardhan:
Vivek Vardhan is a Supply Chain Management Professional and has project management exposure of five years. He has overall 21 years of work experience.

References:
[1] Book: Organizational Behavior by Stephen P. Robbins
[2] Project Management Body of Knowledge (PMBOK) Guide, 6th Edition, by Project Management Institute (PMI)

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• PMP Protein: How To Be A PMI-PMP
• PMP Protein: How To Prepare and Submit PMP Applications
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PMP Protein: Ensuring Effective Communication by Team Members and Middle Management

By Suresh K, PMP

Communication should both be effective and efficient. In any organization, a bulk of communication happen among team members and middle management. There are many areas that can be improved to have effective communication for team members and middle management in order to meet organizational objectives.

In this article, I’ll focus on few such areas where improvement can happen. 

1# Introvertedness
In any organization, there will be introverts, extroverts as well as ambiverts. However, it’s more complicated for introverts to process interactions and events. Introverts carefully attend to their internal thoughts and feelings at the same time. 

If the reporting supervisor of the team member is an extrovert, he or she may feel the communication gap when quick, spontaneous and confident decision-making is required by an introvert team member. If the reporting supervisor is an introvert, then the impact on productivity will be greater. In such cases, the team members should report to higher authorities in skip level meetings which are conducted periodically within the organization. 

It doesn’t mean being introvert is bad, however, improvement is necessary.

2# Pre-determined mindset 
A pre-determined mindset affects communication. Minimizing or avoiding predetermined mindset tends to increase internal communication encompassing both official and unofficial channels. This will also help the team members deliver effectively and productively. 

With a pre-determined mindset, either the line manager’s or team member’s communication becomes one-sided. This should be avoided, because communication is never one-sided. Also, the process of communication involves more than just words and communication is mostly nonverbal in nature.

While communicating, team members and middle management need to have presence of mind, too. Internal communication should be an optimistic approach to keep everyone informed and have a climate of openness, which leads to an increase in productivity.

3# Listening Skills
Listening involves interpretation and spontaneous analysis of manager work and/or administrative instructions. Listening requires proper feedback by team members in-line with the work targets.

Immediate supervisors are also equally responsible to practice listening while getting team members’ valuable work inputs and ideas. This keeps team members motivated with proactive approach leading to increased productivity.

Autocratic managers, on the other hand, many times communicate in one direction. They need to ensure more bidirectional communication, one-on-one meetings with team members and improvement in listening skills.

4# Wearing Supervisor’s Shoes for Objective Analysis
Team members when not convinced with the work instructions per self-analysis then they need to interpret keeping in view of reporting supervisor’s instructions aligning with the work targets, follow ground rules and work ethics for effective team communication.

5#Understanding Organization’s Vision, Mission and Goals
Team members and middle management should have broad awareness of organization’s vision, mission, and goals. These are essential to avoid biases in communication. Biases in communication have severe impact on its fidelity and hence effectiveness. 

6# Awareness of Different Organizational Work Cultures 
No organization operates independently on its own, rather it exists within the larger ecosystem of the enterprise. There will be suppliers, contractors, regulatory bodies and partnering organizations, with whom top and middle management as well as team members interact. Hence, they should have awareness of different organizational cultures for effective team work and effective communication.

7# Inherent Political Environment 
Politics is inevitable and it will happen in any organization. Politics when used for the betterment of projects leads to good outcomes. However, when the inherent political culture leads to biases, then communication become problematic and many times, this leads to pre-determined mindset and communication gaps. 

Middle management and team members should be politically aware and avoid such kind of biases.

Conclusion
In conclusion, I would say organizations should have mentor trainings and periodic counselling for both team members and management to ensure effective communication. 

Brief Profile
K.Suresh
Manager – Mechanical (Projects)
Installation and Execution of Industrial Projects in Oil & Gas, Power Sector, Plant Commissioning.


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• PMP Protein: Top PMP Apps to Assist You
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• PMP Protein: How To Be A PMI-PMP
• PMP Protein: How To Prepare and Submit PMP Applications
• PMP Protein: Types of Organizational Structures
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• PMP Protein: Earned Value Management – Basics
• PMP Protein: Strategic Planning, Analysis and Alignment
• PMP Protein: Earned Value Management – Advanced
• PMP Protein: Critical Path Method – Basics
• PMP Protein: Seven Basic Tools of Quality
• PMP Protein: Gaps in Project Management in India’s Construction Industry
• PMP Protein: Organizational (Project) Management – A Facelift
• PMP Protein: Facing the Sun
• PMP Protein: Project Management Practitioners’ Conference 2018 - A Feast of Knowledge
• PMP Protein: Requirements Gathering Methods
• PMP Protein: Emotional Quotient – A Risk Factor
• PMP Protein: Leadership and Team Building
• PMP Protein: Understanding Brainstorming
• PMP Protein: Changing Work Cultures and Organizational Impact