Money Manages Itself. Doesn’t it?
Money Manages Itself?
No, don’t worry, I haven’t gone crazy. I obviously don’t think that money manages itself and you don’t have to plan, control and monitor where the project is spending it. So then why did I choose this title?
The reason is that not long ago, a friend of mine was talking to someone who stated that “money manages itself”. You would think that it would be someone who just left school and has no experience, especially no experience in project management. You couldn’t be further away from the truth! The person saying that has worked for the company for over 20 years, and he has been managing projects and programs for over 15. And he is now a director of operations, managing a yearly budget which is probably over 50M€. It’s hard to believe, isn’t it?
No matter how crazy this looks, it has an explanation. This person works for a company where projects last a minimum of 2-3 years, sometimes even 5 or 6. The company has grown very fast in the past few years. And we all know that when you run multi-year projects, you can be “creative” when you measure progress on a project. Using Earned Value Management on a very long project it is very easy to achieve the numbers the company requests by the end of the year. That will cause, if the project wasn’t properly controlled, that by the end of the project there will be a lot of cost with minimum or no earned value. But that can be “solved” if there are new projects that can help you achieve your financial goals.
If you are in an organization that works like this, it is easy to think that Money Manages Itself. However, this is a constant lie, that sooner or later will be uncovered. As soon as there are no more big project to continue with the lie, numbers will show up. And unfortunately, this happens more often than you think. Remember Enron?
So what can you do if you find yourself in this situation?
It is not easy to deal with this situation, as it is usually a result of the pursuit of company goals. But who said the project manager work was easy? This is what I would suggest if you are in this situation:
- Make a good budget estimation and cost control. In this situation it is possible that your boss does not request it from you. But as a project manager you have the obligation to control your costs and know the real situation of the project. Don’t let you be carried away by the situation. Do your job and always report the truth. In doing so, you can influence people around you to do the same. And your boss will have all the information to take an informed decision.
- Try to educate your boss and your collegues. Sometimes people do things just because it is what has been done before. You need to give people reasons why every project should have a good budget estimate and cost control. And you may have a nice surprise and have people convinced!
- Quit. I know this is a bit drastical. But think for a minute. If your bosses make you report skew or false information about your project:
- Your work is not being recognized. You may be better in a place where project managers are valued.
- Who is going to be responsible when the project goes overbudget? Right: the project manager
I want to finish with a positive note. Most people do things wrong because of their ignorance, not because they choose to. Having this in mind, don’t resign yourself when you see bad management practices. Instead, be proactive and explain the benefits of doing things in a different way.
Tags: budget, cost control, management practices