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“Do I use permanent or contractor project managers?”
As somebody who has spent the last twenty five years working as an Independent Contractor (IC) in IT Project management / Quality management, I am often asked, “Should Project Managers be permanent staff or contractors?”
I usually respond with the question, “How do you define a project? – If the word temporary or short term comes to mind, then the resources used on the project will also be temporary and that should also include the PM.”
Base load vs Peak load
I think a neat way to look at it is this: We all understand simple power consumption, especially here in the Middle East where keeping the AC on has become a significant factor in any power company’s role. When you consider any power provision, there is the base load, the level that its supply provision typically doesn’t go below, and then there is a peak load which are the periodic fluctuations in consumer usage. The classic example usually cited is the extra thousands of kettles put on at half –time during a big football or rugby match.
Applying this analogy to our business, there is the ongoing operational effort required to keep the business running – the base load and there are the strategic transformational programmes and projects that will introduce new products and services to our business – the peak loads or increased demand.
How do we best supply this increased demand?
Utility companies deal with it by using additional standby power generating plants or by buying in additional power as required from independent suppliers.
The same applies to your project management requirements. You don’t need an office full of permanent project managers. There is a requirement to have some permanent staff to maintain continuity and to assist the PMO with day to day project management tasks and any ongoing projects. However, there are some aspects that should be considered when planning your project resourcing using permanent staff.
Costs should be grossed up to include tax, pension and NI contributions that the company makes on their behalf. One should also apply a contingent weighting cost for office space, expenses, holiday pay, sick pay, training costs, maternity pay, end of service benefits payments, stock sharing and in some cases, redundancy payments.
When planning, book permanent staff at 50% utilisation since they invariably have day jobs to attend to as well as personal admin, company meetings, time off, and company or compliance initiatives and personal development training.
When defining the project deliverables, remember that permanent staff leave too, so it pays to make knowledge transfer a clearly defined project deliverable.
Companies generally employ IC Project Managers because they are experienced they have proven project management skills and importantly, as an IC, they are easy to get rid of at the end of the project. From an accounting perspective, the whole budget can be tidied up during project closure including any bonus to the team and manager. No end of service benefits calculations, no ongoing accrual of pension rights and no ongoing social security or other tax liabilities.
“But what about technical knowledge?” I hear you say! Project Managers don’t need to be technically qualified to manage a project. In fact PM’s who lack technical knowledge generally do a better job because they don’t get dragged into developing technically elegant solutions, but remain focussed on their job…delivering the project.
Some considerations should you be considering using Independent Contractors
- An IC Project Manager will usually try to avoid the company politics, but they do need support from senior managers to ensure that they are empowered and this must be clear to the team. It is a good idea that a significant stakeholder is also the project champion and is seen to be supportive of the PM.
- IC’s are in it for the money and they will have a vested interest in extending their contract. That said, they should not deliberately extend a project, otherwise their reputation will be ruined. It’s a small world these days and word travels quickly.
- If you are presented with an hourly rate, also agree the working hours and ensure any process for agreeing extended hours working is included in the contract and adhered to.
- Ensure that knowledge transfer is a defined project deliverable and time is scheduled for it.
- Pay the IC for the work that they do – don’t quibble and penny pinch. You expect them to perform professionally – pay them the same courtesy. If somebody doesn’t pay you on time how quickly do you seek out the reason why? Pay on time according to the contract.
- IC’s are businesses. They have to pay expenses and pay wages the same as a larger enterprise, so negotiate a fair rate. Don’t beat them into the ground. You need a PM who is happy to work, not one who is worried how he is going to make ends meet.
If you are considering becoming an Independent Contractor
- Don’t do it if you want stability and security and a job title with a hierarchical growth path.
- Acquaint yourself with marketing yourself and personal branding.
- If you are like me, you can use contracting roles to facilitate travelling and working around the world.
- Like any good Project Manager, conduct a risk assessment and be comfortable with the risks and mitigating strategies.
I have been blessed to work with some incredible characters and I have also had my share of the worst. If you are hiring an IC, don’t buy the cheap one, do some research – I have learned that experience is a price that is still very much well worth paying for!
Disclaimer: The views and opinions expressed in this article are mine and do not necessarily reflect the official policy or position of any company that I am associated with.
Who employs a coach? ….Winners do!!
Coping with change
A couple of weeks back on a coaching call, my client related a lovely story that she had shared with some of her school children and I want to share it with you.
A monkey was walking through the Jungle, when it came upon a hole in the ground. When he looked into the hole he saw a juicy ripe Marula fruit at the bottom of the hole. The sides of the hole were quite narrow and it took a little while to wriggle his hand down into the hole far enough to reach the fruit. At last he grabbed onto it and when he tried to withdraw his hand, he found that he couldn’t because his clenched fist prevented him from being able to extract his hand along with the Marula fruit.
He struggled for ages to get his hand out. Eventually a passing porcupine stopped and asked him, “Why do you have your hand down that hole?” – “Are you stuck?” The monkey explained he had spotted the Marula fruit and how he had grasped it, but now he was unable to remove his hand whilst holding the fruit. The porcupine thought for a minute and then asked the monkey, “What else is there around you that could help you get what you want?”
The monkey looked around and suddenly realised the whole forest floor was littered with Marula fruits in abundance, just there for the taking. Because he had been so focused on the one in the hole, he had completely missed all the other opportunities.
True to life?
How true to life is this? How many people do you know who cling desperately to outmoded thinking like survivors cling to the flotsam of a sinking ship?
In her book Death and Dying published in 1969, Elizabeth Kubler-Ross produced a model which has subsequently been found to be useful in the majority of situations relating to change. According to Kubler-Ross, there are FIVE distinct stages, Denial, Anger, Bargaining, Depression and Acceptance and these are transferable and can vary in intensity from person to person.
Following a bit of research on the internet, I found a great example in a grief web-site – thank you Windstream.net.
Imagine you are late for work, you rush out of the house get in the car, drop your keys, curse as you fumble for them, insert the key and turn it and ….. whhaa whaaaa whhaaaahh –
The battery is flat!
- DENIAL— What’s the first thing you do? You try to start it again! And again. You may check to make sure the radio, heater, lights, etc. are off and then…, well, you try again!
- ANGER — “%$@^##& car!”, “I should have junked you years ago.” You slam your hand on the steering wheel and shout. “I should just leave you out in the rain and let you rust.”
- BARGAINING— (realizing that you’re going to be late for work)…, “Oh please car, if you will just start ONE MORE TIME I promise I’ll buy you a brand new battery, get a tune up, new tires, belts and hoses, and keep you in perfect working condition….please start..”
- DEPRESSION— “Oh God, what am I going to do? I’m going to be late for work. I give up. My job is at risk and I don’t really care anymore. What’s the use?”
- ACCEPTANCE — “Ok. It’s dead. Guess I had better call the garage guy or find another way to work. Time to get on with my day; I’ll deal with this later.”
This is not a trivial example. We often all go through this process several times a day. A dead battery, the loss of a parking space, a wrong number, the friend who doesn’t pick up your call, a job you missed, an overdrawn bank account, supermarkets out of stock of your favourite muffins or the cashier close just as you get to them!
Sometimes (more often than you would think), people get stuck like the monkey, holding onto a precious item that prevents them from moving forwards, like the old girl down the way who refuses to have a mobile phone, a hearing aid or glasses because she doesn’t like ‘em or the way they make her look.
Like the porcupine in our story, Coaches are trained to ask deep pertinent questions that empower people to reflect and seek alternative views of their current situation. They help people to focus on fixing the things they can fix and not on things they cannot!
I was moaning about the state of the educational system and the flagrant inequities that exist between universities based in the East and the West when my Mentor Coach, Dr. Clare Beckett McInroy, stopped me and asked, “Mike, it appears to me that you have two choices; either you can expend more energy moaning about the problem as you see it; or you can do something to fix it!, Which one is it going to be?”
This is why I am a coach, because like Dr. Clare, I am about solving problems for people.
One last thing, please don’t just call me if your car battery is flat or you find a monkey with his hand down a hole – okay?
Who employs a coach? Winners do!!
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Adam and the Ants – Stand and Deliver Album Cover
Many years ago, “Stand and Deliver!” meant giving up your valuables or your life could be forfeit. Highwaymen were a common problem in England from around 1650 to 1800, where travel was already hazardous due to the lack of decent roads, no one rode alone without fear of being robbed. Often, people would group together or hire escorts to reduce the likelihood of attack and many travellers completed their wills before setting out on their journey.
This is an early example of risk management and some associated coping strategies. For instance, grouping together is an avoidance strategy based on the premise that the highwayman will not attack a larger group. Hiring escorts is a transfer strategy where the responsibility for action is transferred to the third party escort for a fee, writing a will could be construed as an acceptance strategy, by ensuring contingent measures for your family should you be unfortunate enough to not survive the ordeal and a mitigation strategy would be to adopt a completely different route.
In today’s world, “Stand and deliver!”, usually refers to a presentation, but let’s stay with the risk management concept for the moment.
As an experienced Project Manager, I have learned that good risk management is an important tool in the PM toolbox. Most PM methodologies now cite extended processes for identifying positive and negative risks, for analysing risks and for placing them into an organised Risk Register. These methodologies also suggest and recommend techniques for planning risk responses and even suggest strategic categories for dealing with negative risk such as avoidance, transference, mitigation and acceptance, whilst for positive risk there exists acceptance, enhancement, sharing and exploiting.
So, we follow these process and arrive at a well-crafted Risk Register that provides thought out details of the project risks, their probability, their likely impact and of course the coping strategies. Which the various methodologies also suggest should be part of the Project Management team’s current folders and should be regularly re-visited and updated.
But, rather like those expensive strategy reports produced by the big consultancies, how often do we really refer back to them? Maybe someone should take that up as a dissertation subject.
Newsflash – Risks change!
Issues are more often than not a risk that has become an issue or they are a risk that wasn’t captured that came up and bit you. For the unexpected issues, one has to think on your feet and deal with it as best you can, but for the known risks, there is a documented coping strategy for dealing with the risk and these may be equally applicable to the issue.
In reality, one should aim to avoid the issue by managing the risk appropriately, but sometimes it can’t be helped. We all know a case where the main expert on the project falls ill or is picked up for another “more important” task and you are expected to “Carry on!”.
A good programme manager will insist that all PM’s under their influence have regular risk meetings where the risk register is reviewed and updated. This means a serious review of the top 20% of the risks, a review of the watch list (a watch list is a list of risks with low probability / impact ratings which are monitored in case their probability changes), and a brainstorming session to identify any new risks not previously identified which might be sneaking up on you.
One of the support functions of a PMO should be to provide historical risk registers, so you can build a risk register that has relevant historical risk built into it and you can also see in the lessons learned what worked and what didn’t work so well. Lessons learned are another great resource that should be lodged with your PMO.
The other point to note is that Risk management and coping strategies are a shared responsibility. If you are a stakeholder and you are identified as a risk owner, then you are responsible for doing something about your allocated risks. If you have to “pull” the expert, provide some time for a reasonable handover or keep them in an advisory capacity to the project, so as to give the PM some room to manage the impact.
By using historically successful examples and by working together, collaboratively whilst taking responsibility for our actions, we can develop risk management strategies that are effective and that mean the possibility of the project being impacted are much reduced.
These days, my daughter tells me that, “Stand and Deliver simply means ….it’s your turn on the Karaoke machine!”
As a seasoned Project Management Coach, I can help your teams see the historical benefits of good risk management and develop and embed modern proven techniques into your methodology. Should you need advice or assistance in dealing with risk management – contact me!
Now, Stand and Deliver by Adam and the Ants ……..where’s that microphone?