Japanese agency stops funding for Bullet train project

While teaching project management it is very interesting for me to teach stakeholder management where as it is not that interesting when it is about  ‘enterprise environmental factors’. One of today’s main news item is about the stoppage funding of the bullet train project by Modi, because the project team did not address the farmers grievances (fair compensation for the farmlands lost to this project). From a professional project management perspective, this is a very interesting case which combines stakeholder management and enterprise environmental factors.

Anybody who is affected positively or negatively by doing a project or by delaying a project or by not doing a project falls into the category of project stakeholders. Any thing that can affect a project like culture, national holidays, business rules, ethics, environmental regulations, waste disposal norms, working hours, trade union norms are all examples of enterprise environmental factors.   It will be very interesting to identify the key stakeholders of this bullet train project, and analyze how the enterprise environmental factors affect the decision making and stakeholder management.

Business today link 

National Herald

India times 

Lessons from a crowdfunding social service project

We started a crowdfunding project to construct a home for a family whose house got washed away during the Kerala floods 2018. This was our first experience in a crowdfunding project. Here are the lessons we learnt out of this project. 

Credibility of the idea and the promoters are the key success factors for every crowdfunding project.

Credibility of the promoters is the most difficult to achieve. It has to be built over a long period of credible track record.

During execution phase of the project, trust of all the stakeholders have to be built by bringing in absolute transparency of the project (funding, expenses, project progress, project risks, forecasts of time and cost). This is achieved through continuous communication. We used whats-app group, facebook page and the wordpress blog for this purpose.

Probability of scope creep is much higher in crowd funding projects, as the expectations of the beneficiaries escalate during the project execution, when they understand that it is funded by multiple people , hence the illusion that there is plenty of money.

There has to be a key project manager, who owns the entire project, and accountable to the sponsors.

For one of our projects, we started raising funds from people. Then another sponsor who was willing to sponsor the entire project turned up, scuttling our initiative to generate public interest in the project. In fact we started receiving donations for this project and we had to get the permission from the donors to use the funds for another similar project. Getting a single sponsor is good for the beneficiary and at the same time it is a risk for crowd funding.

Ensure that the beneficiary have not sought / applied or is eligible for any alternative funding, before going for crowd funding. Other wise it will lead to point 6. Sometimes we will be preventing a better opportunity (funding) by linking them to your crowdfunding project. There are many larger sponsors out there. So please check whether the project under consideration is eligible for any other source of funding.

Funds have to be distributed against the milestone completion only. Pay it directly to the vendors and service providers. Do not entrust money to the project beneficiary, as it can be misused.

If we are constructing a new house, the risk is very low compared to demolishing an existing house, as the ownership of raising sufficient finding to complete construction falls on the project manager. In such cases, do not even start without sufficient funding required to complete the project.

In new constructions, we have the freedom to start developing and show progress as soon as funds start coming in. This in turn will generate more interest among the sponsors, resulting in better funding.

We started with one project (home for a person whose house was washed away during the floods) based on impulse and intuition. That gave us more confidence to venture into the second project, and the funnel is growing. It would have been better if we had managed it as a program, with a standard design, bill of material, budgeting and funding for the program, than for individual projects. In this case we could have raised funds against the program, instead of individual projects.

Hope to come out with more lessons learned as we progress further.

Visit the crowdfunding project web site 

Organizational structures and their impact on stakeholder management

Organizational structures can be broadly classified into;

  • Functional organization
  • Matrix organization
    • Strong matrix
    • Weak matrix
    • Balanced matrix
  • Projectized organization
  • Composite organization

Functional organization

Most of the manufacturing / service organizations are divided functionally. Each function will have a head, who in turn reports to the CEO. For example an automobile manufacturer will have functions  like;

  • Manufacturing
  • Sales & Marketing
  • Research and development
  • Procurement
  • Finance
  • Human resources etc..

Each of these functions are headed by a senior manager (functional managers), who in turn report to the CEO.

Matrix Organization 

In matrix organizations, the team members report to more than one boss. Team members may report to the project manager for the project related activities, and to the functional manager for specific function related activities. For example, a technical architect in a project may report to the project manager for project related activities and at the same time report to the Chief Technology officer (CTO) for technology related stuff. Most of the product companies, which calls for multi-disciplinary skills to develop the product of the project falls into this category.  Matrix organizations are further subdivided into;

  • Strong matrix (Project managers have more authority than the functional managers)
  • Weak matrix (Functional managers have more authority than the project managers)
  • Balanced matrix (Both the functional manager and the project manager have the same authority levels.

Projectized organizations

In projectized organizations, whatever they do is a project. For example; I.T projects companies, Civil projects companies etc. They perform projects after projects. Project manager and the teams are the breadwinners of the organization. Project managers have maximum authority levels in projectized organizations. In projectized organizations, all other functions play the support role to the project.

Composite organizations 

Composite organizations have a combination of functional, matrix and projectized structure.

A through understanding of the stakeholder’s (customers, suppliers and your own organization) organizational structures will help in accurate mapping of the stakeholders into;

  • High power – high interest
  • High power – low interest
  • Low power –  high interest
  • Low power – low interest

Examples

  • Project managers in functional organizations have very low authority levels
  • Functional managers have more authority than the project managers in functional organizations
  • Project managers have maximum authority in projectized organizations
  • In matrix organizations, the power of the project manager and the functional manager varies based on whether it is a ;
    • Strong matrix
    • Weak matrix
    • Balanced matrix

This knowledge will help us to go beyond what is drafted in the contractual documents and manage key stakeholders very effectively.

The following videos explains this further

Why proper stakeholder identification is a critical success factor for your project?

Anybody who is affected positively or negatively, by doing a project or by delaying a project is a stakeholder. Identifying the key stakeholders upfront helps to capture and manage their expectations proactively. For any given project the direct stakeholders are;

  • Sponsor (customer) of the project
  • Project manager
  • Delivery head
  • Team
  • End users of the product of the project
  • Business analysts
  • Product owner

The indirect stakeholders list can be very vast, and at the same time identifying and managing the indirect stakeholders is key to the project’s success.  It is very difficult to come out with a universal list of indirect stakeholders. Here is a sample;

  • Families of team members (If they are unhappy, most probably the team member may resign her job soon)
  • Competitors (They can recruit some of your key team members)
  • End users of competitors products (Customer complaints, especially against your competitor’s products is very useful)
  • Intellectual property bodies (do not violate them knowingly or unknowingly)
  • Government agencies (must manage well)
  • Trade unions (be careful, if your product is going to disrupt an existing market. Online taxi operators like Uber, Ola  Vs traditional taxi operators, Amazon Vs traditional shops)
  • Product review groups (social media) (Most of them are paid reviewers. Do not forget to budget for them)
  • Any other groups (Even the name of your project / product should not harm anyone’s culture, religion etc…)
  • Any citizen (farmers, drivers, pedestrians, vehicle owners…anyone) who is affected negatively during or after the project.

It is worth spending time to identify the key stakeholders and their impact on your project / product individually and collectively, at the beginning of the project and throughout the project.

Once the stakeholder list is prepared, the next logical step is to group them into;

  • High power, high interest group
  • High power, low interest group
  • Low power, high interest group
  • Low power, low interest group

and develop strategies to maintain a high degree of stakeholder interest in your project / product (stakeholder engagement). If all the key stakeholders are happy during and after the project, your project is a success story.

Reference stakeholder mapping