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The human side of earned value management

Some years ago, I was working in a company that manufactures and installs marine power plants around the world. One of their typical projects lasted for 4 to 5 years and contained many sub-projects which in themselves had a value of millions of dollars. The sub-projects were further broken down into work packages and then into tasks.Button

Each work package had an owner. This was typically an experienced Mechanical or Electrical Engineer who had shown good technical skills and was promoted to a managerial position. I had been invited to be part of a competency development programme for these managers.

This involved interviewing 250 managers to gauge their knowledge and skills. People were very willing to open up during these one to one chats and it soon became apparent that there was one specific issue that needed to be addressed – their use of Earned Value Management (EVM) as a project control tool.

Sometime previously, the Company Directors had implemented an EVM system and now received a monthly report on every work package. But as one interviewee confided “they shouldn’t be worrying about why three work packages have an SPI less than one, they should be asking why the other 25 are all at exactly 1.0”

The work package managers had quickly realised that if their SPI or CPI were less than 1.0, they had to spend time explaining why. This was something they didn’t really want to do, and the easiest thing to do was to make sure the indices were 1.0. They had all had extensive training in the mechanics of EVM, so a little creative interpretation was not a problem.

It fell to me to explain to the Board that understanding a scheduling technique is only 20% of the way to success – the other 80% is about changing behaviour. Unfortunately, they didn’t want to see the problem and were convinced the system was OK as it was (after all, it was telling them exactly what they wanted to hear).

All I can say is that some years later, the press was full of yet another failed defence project!

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