Keeping Important Projects on Track Despite Challenging Times By Jim Stroh

With a stagnant economy, layoffs across industries, and budget cuts everywhere, many companies have put the brakes on new projects. As a company leader, now is the time for you to take stock of your 2009 projects and reassess their importance and organize by priority. How can your business adapt to keep critical initiatives moving forward despite reductions in the personnel and funds needed to complete them? A little ingenuity and flexibility can go a long way in getting your business through this pinch.

Tip One: Consider outsourcing certain aspects of business critical projects to keep them moving forward.

Forget new hiring budgets – most companies are now faced with how to do more with the people they currently have or trying to decide which personnel to lay off should things get worse. So what can companies do to ensure their essential projects move forward with no budget left and plenty of work to do? Get creative.

Examine where you plan to reduce headcount and think ‘Can I outsource these functions related to the cost of the project versus the cost of the labor pool?’ Focus on execution. Line up what you have to do this year and line that up with what you need to do. Make labor adjustments accordingly.

Tip Two: Negotiate compensation of outsourced providers on a performance or success basis.

For example, a company can reduce labor in one internal service to accommodate a needed project. Then, by outsourcing “care and control” of the initiative (i.e. project or service management), the project is effectively managed by a third party. The third party is compensated on execution successes, not simply for putting in hours against the project. Another benefit: the costs for “care and control” terminate when the project is completed. As a result, three goals are met:

Commonly, when companies holistically “remove labor,” the companies’ productive output either suffers or degrades over time and the recovery costs when economic conditions change far outweigh the short-term savings. Guard against that happening in your business by considering how the functions you outsource to meet today’s needs can evolve to contribute long-term benefit to your business. If, for example, outsourcing “care and control” of your company’s projects and initiatives to a skilled and focused third party delivers great results during tough times, could this arrangement turn into a new business practice with a whole new set of measurable inputs for projects when the good times return? We should always ask ourselves what our expenses are returning to the bottom line.

Tip Three: Revisit contracts signed with vendors in good economic times and try renegotiating them.

Businesses starting the new year off in a tight financial spot may find themselves saddled with long-term contracts signed in more prosperous times. If you have supplier or service contracts that you’re having trouble fulfilling now, try sitting down with your providers to take a fresh look at them and renegotiate.

In this environment, everyone needs to bend a little – especially suppliers who hope to keep your business, even if they have to make concessions or deliver value in different ways. Remember, they’re having the same tough time you are.

See if vendors are willing to get creative and help you execute essential tasks and defer or reallocate spending previously assigned to something else, like product. Ask them to rewrite contracts in existence so that they are more in line with your immediate business needs. For example, can they make changes to their model for services delivery or execution to one that is more performance or success based? Can they upgrade your hardware or provide some other benefit that will help you keep moving forward with, say, your CRM or ERP installation? You may be able to delay the redirected funds by twelve months maintaining the overall commitment, but reducing the annual committed target in 2009.

Tip Four: Require consistent communication and visibility on all projects underway.

This is no time for the CEO and other members of the management team to lose track of what’s happening with the most critical projects and initiatives underway in the business. In tough times, it helps to have everyone in the organization from the C-suite on down communicate well and stay informed on new developments and directives. You can help lessen your team’s anxiety about layoffs and increase the effectiveness of your company-wide communication by following these three steps:

1.)   Make a process review on major projects part of the weekly team and management meetings. Identify strategic and tactical plans for improvement. Have each division leader share these updates with respective teams.

2.)   Listen to employees - they know what the pain points are. They’ll also have ideas on how to solve them. Let them know you want and value their input.

3.)   Provide a visual document (high level) to all departments on all ongoing major projects so that everyone understands the entire process and their roles more clearly.

4.)   Require regular budget monitoring and delivery of adherence reports as discrepancies occur to nip potential budget overruns or other problems in the bud.

Proper planning now, with clear business requirements and communications protocols, will go a long way in minimizing the punch a recessive economy can deliver.

About the Author
Jim Stroh is a nationally recognized expert in project management. His company, PROGGEX, uses Project Management Institute (PMI) certified project managers and methods to ensure successful, repeatable outcomes, no matter the size or nature of the project. Learn more at www.proggex.com.