Team leader's tolerance
At the start of a stage your team leader says to you: "boss, I've heard about this thing called tolerance
which I understand to mean that I can change my plan in some ways without getting your prior approval - but I'm not
sure what I can and can't change..." How would you as project manager respond, what would you let your team leader
change without your approval? Maybe you're thinking: 'nothing at all'.
But if he's told you the stage will cost 10,000 hours and wants to change his plan so that it shows 9,999 hours you would doubtless be happy for him to do that. And a change to 10,001? Perhaps you'd set something like this as his tolerance limits:
|Stage milestones and end date:||0% tolerance|
|Stage cost:||5% tolerance|
|Hiring and firing:||0% tolerance - he can't hire and fire team members|
|Change of project scope:||0% tolerance - he can't unilaterally reduce scope in order to meet dates etc.|
|Quality:||0% tolerance - he can't sacrifice quality to meet the date (now there's a novelty!)|
|Dependencies:||0% tolerance - he can't change his plan such that it would screw up other parties|
How much freedom has the team leader now got to change the plan without your approval? You may be thinking 'not a lot', but the answer actually is a huge amount.
The team leader can switch tasks between team members, resequence tasks, make some tasks bigger than they were others smaller. He can make a lot of change to the plan without getting anywhere near any of those tolerance limits. There are two points here: first you are explaining to your team leader what he is allowed to do but much more important you have just explained why you pay his salary: he must move things around if that would improve the outcome. He can't change key dates, unilaterally descope, hire and fire, screw up dependencies, sacrifice quality or go more than 5% over his budget but within those limits he must manage to best effect.
If you do not have this five minute discussion with novice team leaders they are sometimes frightened to change anything in their plan in case they breach a limit they didn't even know was there. You are empowering them - indeed obliging them - to change their plan if that would be beneficial.
(Quiz. Six team leaders each have 5% cost tolerance on their bit of the plan. They all use their 5%. By how
much has the overall budget increased? 5%.)
What should the project manager do to keep a grip?
These days some sophisticated clients of large software development projects demand that their suppliers
include contingency in the project plan and budget and show them (the client) where it is in the schedule. Then
every month report how much of the contingency has been used and for what, and therefore how much
contingency is still left. This level of maturity is rare among sponsors in process-based companies - we
all have an informal education job to do to explain that contingency is there to help them make
their project successful.
The project office has no part to play in controlling the project.
All they do is administer the processes, add up numbers and maybe physically produce the report you'll show the sponsor. This is not to say their role is unimportant. On the contrary it's vital. On a large project if change requests aren't administered properly there could be chaos - but the management of change, i.e. making decisions about change requests, is the project manager's job. Similarly, the team leaders produce, revise and own the plans for their teams - their plan is a tool they use to help them manage the work of their team - it is not a bit of administration to be shuffled off onto the project office.
The project office no more runs the project than the Managing Director's secretary runs the company.
How does the sponsor know what's going on and keep overall control of the project?
Let's say you as project manager have committed a stage cost of 10,000 hours to the sponsor and you have 10% tolerance - you must come in between 9,000 and 11,000 at the end of the stage.
But you realise at the end of week 1 that it won't be 10,000 it will cost 12,000. You've only spent tuppence so far, but you must inform the sponsor now of this projected overrun.
The sponsor reluctantly agrees to approve a revised budget of 12,000 hours with new limits of 11,000 and 13,000. But at the end of week 2 guess what? Sorry, sponsor, I think it's going to cost more like 15,000. The sponsor will conclude you don't know what you're doing.
Going back once within a stage with your begging bowl happens all the time. Going back twice as above will be a bit painful for the project manager. But the pain of going back twice is nothing compared with the pain of coming in after the end and telling the sponsor you've overspent the upper tolerance limit. If you do that you get hung, drawn and quartered (and then fired). This is an encouragement to come forward during the stage as soon as it becomes clear you'll need more budget. The sponsor must be able to control what is spent in his name before it is spent.
Bear in mind the budget, 10,000 in our example, includes the change and contingency budgets both of which are estimates of the amounts of money you think you are actually going to spend, in exactly the same way that the travel or testing budgets are estimates of amounts of money you think you are going to spend.
If the project will under run its 9,000 lower tolerance limit, why should the project manager have
to come forward and tell the sponsor? So he can spend the money elsewhere. (Please email us if you ever
see this happen.)
Project Management Book
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