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Real_Case Analysis No. 1. First Installment: Initial Scenario

edited June 2012 in Project Management

I did not realize I was a PM at heart until later in my professional career. For many years, I considered myself a "starter". I preferred jobs that allowed me to initiate, participate in, or contribute to something new. And as soon as the given innovation was in place and running, I would usually set sail to continue on the same thread but in different waters. I was principally driven by implementing innovation, any innovation, and not necessarily by a long-term stay at any job place. Content wise, there was, nevertheless, some degree of continuity in my line of work. After a while I learned how to be hired on a per-project basis. Soon, I did not speak about "having a job" but about "working on a project". And those projects increased in complexity with time. And such complexity was reflected not only in the diversity of fields of study involved in many of the tasks, but also in the intricate array of circumstances in which the project activities often took place.

My background is in Physics, Science Education, and Business Development. I currently operate as an international consultant in the area of "Cultural and Creative Industries", and I am seeking PM certification as a competitive advantage in the marketplace.

The most challenging project I have ever managed is briefly described in 28 slides on the following link. This project constituted a milestone in my career for two main reasons: first, the opportunity to manage a dynamic constellation of contextual factors and, second, the merit of the results in the eye of the public, often in disagreement with the rigid mindset of the principal stakeholders. The flow of the project certainly posed many technical problems that needed to be resolved, and it pressed as well for the right management decisions in terms of schedule and cost amongst others. But, in this particular case, the bulk of the project management difficulty resided in dealing appropriately with an unprecedented panoply of interested parties.

The initial intention of the customer regarding the project was stated as follows:

From 1st June to 31st of October next year, Germany is hosting a World Exposition for the first time. At EXPO 2000 Hanover, whose theme is "Human Kind - Nature -Technology" there will be over 180 participating countries and international organizations with different proposals to meet the great challenges that humankind will face in the 21st Century. Mexico accepted the invitation extended by the German Government in April 1995 to participate in the EXPO 2000 in Hanover. For Mexico this is a great opportunity to show Europe and the World in general its economic, social, political and cultural achievements, in addition to opening up possibilities for new investments and, of course, building a showcase for tourism.

A Commissioner General representing Mexico in the EXPO 2000 Hanover will be appointed by the President of Mexico. As to the administration of funds and the organization of Mexico's participation, a Private Trust will be set up at Nacional Financiera SNC (Development Bank) and the Commissioner General will also function as the General Director of the Trust. The Technical Committee and Trustors of the Private Trust will be integrated by the following industry associations: Business Board of Industry Captains, National Chamber of Radio and Television, National Chamber of Electronics Telecommunications and Informatics, National Chamber of Cable Television, and the Mexican-German Chamber of Commerce and Industry.

In addition, and in order to channel Government assistance for the project, the President of Mexico will establish an Inter-Ministerial Commission chaired by the Minister of Communications and Transport with the support of an appointed General Coordinator in the person of the President of the Federal Telecommunications Commission. The Inter-Ministerial Commission will be integrated by the following additional members: Minister of Tourism, Minister of Commerce, Minister of International Affairs, Minister of Environment and Natural Resources, and Minister of Treasure.

For planning, architectural design, museographic scripts, museographic design and executive project, fabrication, installation, and technical operation of the Mexican Pavilion, the Trust will issue a tender by invitation only, limited to a maximum of seven contestant organizations with the necessary expertise and previous achievements according to the caliber of the project at hand.

The Tendering Process will be overseen by the Trust and decided upon by a Panel of Adjudicators integrated by five members: two world renown Architects, one Historian of recognized trajectory in Mexico, one Museologist nominated by the National Museum of Anthropology and History, and one Engineer nominated by the School of Engineering at the National University of Mexico. The Terms of Reference for the Tendering Process will be issued promptly by the Trust and sent along with an exclusive invitation to the groups that the Trust would previously locate and interview.

I had been involved in a couple of projects for a world-class museum in Mexico City and was still working on them when this information reached my hands. The projects I was working on consisted in preparing the museum for a $40MM renovation of its entire exhibit floor and in driving the creation of a revenue-generating consulting brand for the museum. The organization had the know-how both in engineering and in design for creating new interactive exhibits for the museum floor, and certain key members had been already involved successfully in worthy consulting efforts for external customers. But the organization as a whole did not believe, in my view, that it was as yet ready to play in major leagues.

I was nevertheless very excited in going through the information regarding the EXPO Hannover 2000 opportunity. I thought that participating in the tendering process if invited, winning the project, and carrying out a successful delivery of the Mexican Pavilion would move the organization as a whole to an entire new level exactly in the direction they had envisioned to move. The Hannover project therefore became a possible third project in the list. But first we needed to get invited to the tendering process and win the competition.

I sent the relevant information to my boss, the Executive Director of the Museum, and requested a meeting. She read the information and listened to me attentively. Her first reaction was that there were many risks involved in the proposition. We came up with the following list of warnings:

  • the timeline is too tight because the Government reacted late;
  • there are too many parties involved and many instances of decision making in the project; some parties with conflicting views and some with hidden agendas;
  • raising a combination of private and public funds for the project might not work with the celerity needed given the existing time-pressure and the many actors meddling in the process;
  • the project has a fixed finishing date and it could become a total fiasco if the Pavilion did not open its doors along with the rest of the 180 participant countries in the very day of the World EXPO inauguration;
  • most likely, the Trust would impose a fixed-price contract on the winner with a relatively loose description of deliverables at the outset and no extra funds for requested changes along the process;
  • regarding the building itself, the tendering would only contemplate the architectural design and perhaps the supervision of the executive project and its implementation; the construction will be subcontracted in Germany directly by the Trust office and the process will be completely out of our control;
  • if the construction suffers delays, particularly if it starts in the Winter, which is likely, the time crunch will be on the installation of the interior exhibitry thereby jeopardizing the opening date;
  • given these conditions we would need to carry out parallel fabrication in multiple locations and come into the building as soon as it is delivered and totally dry to carry out the interior works and come back afterwards only for assembling and installing the exhibitry; this would tax the budget substantially and erode the bottom line for us;
  • our organizational structure is undergoing a major overhaul; we are moving from a purely functional structure to one that is process-based and offers more flexibility;
  • our people is still getting used to their dual roles of managing the everyday operation of the museum and at the same time getting involved in the renovation of the museum floor; a third demand of the size and importance of this external project might be extremely disruptive for the internal process of accommodation and assimilation that is taking place;
  • we still need to work on the construction of the consulting brand, but maybe not applying a shock treatment on an organization that is already moving in the right direction;

We agreed on taking the necessary steps to get invited to the tendering process, and then invest enough time in analyzing the terms of reference against the backdrop of our list of warnings and the organizational issues that we would likely confront in trying to put together a winning proposal.

I ask in retrospect: Why did we proceed further despite the ominous scenario? What course of action would you, reader and colleague, have recommended at this point and why?

I will launch the discussion by addressing two early reactions from outside colleagues expressed prior to the posting of this installment. Their reactions and my replies would be included down below as comments to the main post. The discussion is an integral part of the Real_Case Analysis. All comments and precisions would enrich the case. Thanks.



  • Comment 1 from an outside colleague: The scenario, in my opinion, is still confusing and somewhat nebulous rather than gloomy as you seem to suggest. One source of confusion that you might want to elaborate on is the identification of the customer. Who would be the customer in this project? Is the museum the customer? Is the Government the customer? Are both entities customers?

  • edited June 2012

    Answer to Comment 1 from an outside colleague:

    As you may have guessed, this is a project surrounded by a full spectrum of interested parties, out of which the sponsors are only a subset. Who would be sponsoring the project? Where would the funds come from?

    The project would be funded through a combination of public and private sources. The public funds, drawn from the Public Treasure, would be channeled by the Government to the project Trust, and charged to the budget of the different Ministries represented in the Inter-Ministerial Commission. The private funds would be gifts or donations from individuals or corporations interested in having their names or their brands associated with the project.

    We could say, formally, that the primary sponsor would then be the general public through tax proceeds administered by appointed Government Officials. And we could also say that, regarding private funds, the sponsors would be those making donations to the project Trust personally or via their corresponding industry associations.

    Since the Trust would be the entity collecting and administering those funds under the supervision of its Technical Committee, it would then be fair to say that the Trust is the primary customer in this project. The Trust would actually be the entity signing the contract with the winning group. And the winning group would most likely be an ad-hoc Consortium integrated by several existing firms.

    In order to participate in the tendering process, the Museum would have to integrate first such an ad-hoc Consortium including at least two partners: the museum itself and an architectural firm. This Consortium, if it was adjudicated the competition, would acquire a twofold responsibility:

    • the architectural design of the Pavilion, and
    • the design, implementation and technical operation of the Pavilion's experience.

    As a Project Manager in charge only of the second responsibility, I would sign with the ad-hoc Consortium, and not with the Museum. The Consortium would be legally a customer of mine. I would nevertheless draw a large component of the team from the Museum's talent pool; and for that, the Museum would have to receive a compensation from the Consortium. On the other hand, the Museum would still be my customer as far as the two other projects is concerned: the full renovation of the Museum's offer, and the launching of a revenue-generating consulting brand.

  • Comment 2 from an outside colleague: The list of "warnings" points at potential sources of risk that would have to be defined, sorted out and managed appropriately when the time comes. Some of these warnings, however, need to be analyzed further before deciding whether you would be competing for the project. I am referring here to those warnings that point at the heart of project feasibility, namely:

    • availability of funds,
    • time-pressure, and
    • statement of work

    How can you be sure at the outset that the machinery put in place to collect funds from so many sources would produce the required cash flow for the project? If the cash flow lapsed at some point what would be your alternative course of action?

    How would it be possible to assess initial project feasibility under the premises of time-pressure and cash-flow risks if the statement of work is still far from being fully determined?

  • Answer to Comment 2 from an outside colleague:

    You are correct; in the statement of intention issued by the customer, the terms are only half-way defined. The document does in fact mention that the EXPO represents a unique opportunity to:

    • reposition the country,
    • promote recent achievements,
    • generate business investments, and
    • invite tourists to visit

    But it does not mention anything about threats. What are the threats that the country wants to offset through its participation in the EXPO? Each area of opportunity listed should be associated with a possible set of related threats. A World EXPO is a marketplace of countries; there will be other Pavilions, for example, "inviting tourists to visit". Which countries are considered a threat in this respect and why? This question is not addressed in the document of intention, and neither are other important questions in this regard.

    Project requirements emerge from a careful consideration not only of opportunities but also of parallel threats. Otherwise any real measure of project success would become very difficult, if not imposible. The customer would probably not be fully satisfied if we used, for example, the total number of visitors as the only measure of project success. The idea is not to deliver a Pavilion that attracts visitors no matter what. The idea, we contended, is to create a Pavilion with a strong message and a memorable experience for visitors; a Pavilion that provides others with a vicarious experience of the country as a whole; a Pavilion with many readings. None of this was addressed, not even remotely, in the document of intention.

    With regard to the question about feasibility, I should respond that, in effect, not having a work statement complete and clearly set, made it impossible for us to carry out an initial feasibility assessment. And at this juncture in the process we were in no position to risk the sizable expense of putting together a winning proposal in vain. We only hoped that the Terms of Reference for the incoming Competition, or the Model Contract for that matter, would shed light on these issues. And we would certainly be quite inquisitive in the clarification meetings previous to the competition, until this matter was at least minimally covered and we made an informed decision regarding our participation.

    In the Terms of Reference we would expect to find not only the elements leading to a manageable statement of work, but also a suitable explanation about the disposition of funds for the project. Our Consortium would not have sufficient cash or enough banking support available to finance a possible lapse in the cash flow of the project. Before committing any funds on our part to put together a winning proposal we would require from the customer proof of sufficient provision of funds for the project. We would request documentation about the legal establishment of The Trust and about the amount of funds deposited therein. This would be an of-the-essence condition for us to go on.

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