Shipulski On Design

Business is about the effective allocation of resources.  Companies win when they do that better than their competitors.  Full stop.  If you believe that, the question is how to allocate resources effectively.  To me, everything starts with a map of the territory – a single-page map of today’s projects, the people you have, and the tools/infrastructure you have.  In short, before you can reallocate resources, map how you allocate them now.

Let the mapping begin.

The first step is to create a one-page summary (a map) of the resources on hand and the projects they work on (how they are allocated).  A simple spreadsheet is the way to go.  At the top, running left to right, list the names of all the people. Give each person their column.  On the left, running top to bottom, list the active projects, one project per row.  For each project, move left to right and ask if the person works on the project.  Put an X in their column if they contribute to the project in any way.  If they work on the project 2% of their time or more, X marks the spot.  You will be reluctant to do this, but the process is more meaningful if you do.

No fancy formats, no extra text, no headings, no footers, just columns of people against rows of projects.  And it MUST fit one page. MUST. Reduce the font size and the margins to fit it on one page. And if that doesn’t work, set the print area and choose the setting that scales the print area to fit on one page.  Put it on 11 by 17 paper if you must, but you must put it on one page.  You’ll have to squint to read the font when you do it right.

When you look at the one-page printout, the first thing you will notice is that you have too many rows because you have too many projects. (And, yes, you should list the quiet projects no one knows about.) The second thing you will notice is that everyone has too many Xs because they work on too many projects.  The third thing is some people have far more Xs than everyone else’s too many Xs.  All the project managers want them on the projects because they are good at getting projects done.

Let the culling begin.

It’s time to stop.  The best way to stop is to set a maximum time threshold to deliver the first dollar of revenue.  Any project that cannot deliver revenue sooner than the threshold should stop.  The threshold method is crude, fast, and effective.  It’s a great way to do the first pass culling.  For those projects that are difficult to stop due to political factors, don’t stop them but, rather, strongly pause them.  Then, use the reallocation process (described later) to move resources to better projects and let the politically charged projects die a slow death.  Good process beats bad projects.

Strike the cancelled projects from the record, eliminate their rows, and reprint the one-page map.  If you have the right number of projects and they’re fully staffed (this is unlikely), execute the projects that made the cut.  If you have too few projects, the next step is to come up with a set of new projects that deliver revenue sooner than the culled projects.  If you still have too many projects (too many people with too many Xs), it’s time to thin the herd again.  Sort the projects by the revenue they will generate over the threshold period plus three years.  The best projects will bubble to the top, and the bad ones will sink to the bottom.

Let the reallocating begin.

Now, delete all the Xs from the spreadsheet so none of the projects are staffed and no one has a project.  Start with the top row (your best project), move left to right, and place an X in the columns until the project is fully staffed.  Allocate the resources to your best project and get after it right now. Because your best project was understaffed, incremental will flow to the project. This will increase the probability you will hit the launch date or even pull it in.

Next, move down one row to your second-best project and repeat the process.  Add Xs left to right until the project is fully staffed.  But this time there’s a constraint – each column can contain only one X.  Because the people are now fully allocated to and actively working on your best project, they cannot work on the second-best project.  With all the Xs in place and your second-best project fully staffed, work the project hard with the reallocated resources.  Pull in the timeline if you can.

Repeat the process project by project until you can no longer fully staff a project.  And here’s where the game gets interesting. Don’t work a project you cannot staff fully.  There.  I said it.  With new product development projects, there is no partial credit. They’re either 100% done or 0% done.  A project that’s 80% done delivers 0% of the revenue.  But it’s worse than that.  Making “progress” on a project that won’t launch because it’s understaffed consumes functional support resources and will slow down your most important projects.  Don’t do that. Don’t run the project. Just don’t.  You’re better off paying the people to stay home so they don’t consume functional resources needed by the more important projects.

Instead of paying the people to stay home, try to add them to the active projects so you can launch those sooner.  In theory, those projects are fully staffed, but old behaviors die hard, and you probably didn’t fully staff the most important projects.  For the people who still don’t have a project (they cannot speed up the projects), train them on the skills/tools they’ll need for the next round of projects.  This will help you do the next projects better and faster.  Or, they could start on more forward-looking projects that don’t consume resources needed by the more urgent projects.

The process to allocate people to the most important projects is the same for resources like infrastructure for reliability testing or product validation.  With the same fully-staff-the-project approach, allocate the infrastructure resources to the most important projects.  Once there is no more infrastructure capacity, don’t run an under-resourced project.  If you run the lesser project, it will consume those precious infrastructure resources and slow down your most important projects.

You likely won’t be able to staff projects such that each person works on a single project.  The concept is more directional than literal.  Working on three projects is better than working on four, and two is better than three.

I did not describe how to estimate the project revenues, how to create new projects that deliver more revenue sooner, or how to create the right mix of projects – short, medium, and long.  But in a first-things-first way, I suggest you start with a singular focus – reallocate resources to your best projects (and, likely, fewer of them), so those projects effectively deliver revenue your company needs.

I think more focus will bring you more effectiveness.

Image credit — Charlie Wales

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