THE WHITE VAN MAN
(or how not to manage your project budget)
Managing your project budget can be difficult but it doesn't have to be.
You are driving quietly on the road. Your favourite song is playing from your audio system. The weather is perfect for a lovely ride to your destination.
This is when a white van arrives behind you at high speed. It wants to pass you but cannot because of traffic in the opposite direction. The van is now worryingly close to you and there is no way you can move aside. Neither do you want to start speeding yourself. You know there often is a speed control further up this stretch of road. So you stay put, anxiously. But that white van is still at your tail, threatening you more and more. Or at least that is how it feels.
Comes that opportunity for the white van to pass you now that traffic has cleared on the other site. And there is goes like a shot passing by you with some gesture you can guess but do not clearly identify for the blur caused by its speed.
There was no speed control that day. The white van has gone leaving you with some discomfort which takes you a while to recover from.
Having arrived at your destination, you recover from the experience and take the time to analyse what has just happened. You talk to your colleagues about it and disrupt their ordinary day as a result.
Why am I telling you this story?
Because it is an allegory for what often happens during projects.
It’s all about other people’s money and the necessary care needed to manage it.
The driver of that van was obviously in a real hurry. Maybe he wanted to get to his next destination without caring about the consequences of his actions on others. Don’t try to defend him with some poor excuse that would explain his appalling behaviour.
I bet you though, that it is highly probable that it was not his own van.
You would not put your own property at risk by such behaviour. At least I firmly believe most people would not.
You tend to see money as no more than figures on a spreadsheet.
What I have observed over years in project and programme management is that it is always easier to spend other people’s money. You tend to see money as no more than figures on a spreadsheet.
Who cares if we overspend slightly. We’ll recover that later once the project has launched and we start earning a profit.
Let me tell you that you would care if it came out of your own bank account.
The level of attention dramatically increases when such is the case.
You have a very different perspective then.
Your focus on cash being burnt is very acute, believe me.
There are ways to deal with this
Whoever’s money is being spent would typically run projects themselves but they are usually too busy to do so. That’s when the project manager comes in.
Business owners need to work very closely with their project manager whose role it is to manage the budget which is entrusted to their care.
It is essential for the project manager to inform the business owner of any event that may jeopardise the success of the project.
They both need to agree on how they will communicate about this, in terms of format and frequency.
A good way to get started is to identify and agree the basis on which the project actually started. Understanding the conditions and true reasons behind the project will help both of them to focus on what really matters.
Consider defining tolerances
A next step could be to agree on margins within which the project manager can act. That would allow the project manager to have some leeway in dealing with the project. Spending limits could be set which can in no case be breached without warning the business owner. Once the situation the project faces is explained, a decision can be made on how to correct it.
This could also apply to time, quality levels and scope of the project.
This way enables the business owner to remain in control of the project’s budget (or time, quality and scope) without the need to meet with the project manager. Yet, they can have full confidence that the project is on track to achieve its objectives.
You can never guarantee that such an approach will be effective as I make it to be in my short story. There are ways to help to ensure that it does.
We can discuss those if you want. You know where to find me if you need me.