Gambling on Project Execution
A startling statistic that often gets overlooked is that 70% of projects world-wide fail. Each year, more than one trillion dollars are lost to failed projects. Most importantly, statistics show that these failures are frequently not the result of a lack of technical, hardware or software capabilities. Instead, these failures are typically due to a lack of adequate attention being paid to program management.
After seventeen years working in program management―implementing enterprise business strategies and technology solutions―I continue to be surprised by business leaders who misunderstand the differences between project management and program management, or simply think them to be two terms that refer to the same thing. Fact is, program management and project management are distinct but complementary disciplines, each equally important to ensuring the success of any large-scale initiative.
Let’s take just a minute to level-set the roles of both. Project management is responsible for managing the delivery of a ‘singular’ project, one that has defined start and end dates and is accompanied by a schedule with a pre-defined set of tasks that must be completed to ensure successful delivery. Project management is focused on ‘output’. Program management, on the other hand, takes a more holistic approach to leading and coordinating a ‘group’ of related projects to ensure successful business alignment and organizational end-to-end execution. A program doesn’t always have start and end dates, a pre-defined schedule or tasks to define delivery. Program management is primarily responsible for driving specific ‘outcomes’, such as ensuring the targeted ROI of an initiative is achieved. Put another way, program management is basically the ‘insurance policy’ of a project, the discipline needed to make sure all the right things are done to ensure the likelihood of success.
One analogy I often use to help differentiate the roles of a program manager and project manager is that of a restaurant. The executive chef (project manager) works within a defined budget, makes certain the kitchen is adequality staffed and creates the menu. The executive chef will provide defined tasks, processes, tools and strategies that ensure efficient and consistent delivery of meals. The meals are a tangible delivery (output). Overseeing the chef, the restaurant owner (program manager) will provide the executive chef with a budget to work from and will closely monitor the output of the kitchen. The owner will make sure each delivery and support role is adequately staffed, trained and paid (e.g., wait staff, hostess desk, dishwasher, bussers and bartender). The owner will also make certain all the details like music and lighting are in place and establish an appropriate ambiance. The owner will make sure the right tools are in place for flawless execution (such as utensils, glasses, napkins, water pitchers, pens and computers), while making sure expected standards and key performance indicators are being met to achieve overall profitability targets and a great end-to-end customer experience (outcomes). The restaurant owner’s primary responsibility is to focus on merging the tangibles with the intangibles to support successful business strategy execution.
When it comes to mortgage banking, an industry that’s known more than its fair share of failed implementations, it is critical that we start giving program management a greater priority, and ensuring that those commissioned to perform the role are equipped with the requisite skills and tools. Whether it’s adding a new imaging platform, bolting on new CRM or POS technology, or something as expansive as replacing an LOS, every enterprise initiative requires a project manager to be leading the implementation effort and a program manager focused on change management and roll-out. Consider the addition of an end-to-end imaging system. A program manager’s tool box should include strategies and frameworks to effectively manage the roadmap for each critical impact point. This would include things like training, updating policies and procedures, executing an internal change management strategy, synchronizing marketing communications, and updating key performance indicators. In some instances, the project may require staff analysis, skills assessments, compensation analysis and adjustments, or even right-sizing of the organization. All of these are key components of the program manager’s toolbox, and not generally covered within the role of a project manager.
Bringing this dialog back full-circle, program management helps reduce project failure rates by maintaining a holistic approach to guiding an organization’s successful adoption of the impending change, leaving the nuts and bolts of build-out in the hands of project management. By addressing the myriad of intangibles required to orchestrate successful adoption and acceptance of change by an organization’s personnel, program management also helps ensure that business strategies and projects remain in full alignment and ROI objectives are achievable. Preparing management and staff for the impending changes defuses fears that can send adoption off the rails and eases the transitions and realignment of resources and roles that often accompany larger initiatives.
In closing, it’s not surprising to find the lines between project and program management will easily get blurred. Our experience is that it is often difficult to identify a really good project manager that is proven capable of undertaking a large-scale effort, but even more so to find someone truly adept at managing all the moving parts of the program. This difficulty is even more apparent in organizations where undertaking significant projects is a relatively rare occurrence and these skills are simply not found among existing staff. While it may seem adequate to budget for a singular project manager and hope that the program elements will be attended, managed and executed, unfortunately, “hope” is not a viable strategy when it comes to business-critical initiatives. The assignment of a skilled program manager, whether sourced internally or externally, will ultimately prove to serve as an effective insurance policy to your project investment. In an industry where failure cannot be afforded, it’s time to stop gambling on project execution and begin implementing program management
Meet Bill Lehman, CMB, the Director of our Mortgage Strategy Practice. Bill, a graduate of Rensselaer Polytechnic Institute in New York, joined CC Pace in 1982 right after graduation. A visionary and creative process and technology consultant with a proven track record, Bill is an invaluable resource for CC Pace.
Learn more about Bill in the interview below, and, if you are attending the MBA’s Annual Conference in Boston this month, be sure to connect with him there. To reach out to Bill beforehand and/or arrange a meeting at the conference, feel free to contact him: email@example.com.
What was your first client project?
I was a programmer on Fannie Mae’s first securitization system. A few years later, when that system needed to be redeveloped to accommodate the tremendous success of securitization, I was brought back as chief architect for the redevelopment.
What do you feel was one of your most successful client projects and why?
It is hard to narrow it to just one, so I will pick two.
The first was a client where we were really successful leading a business transformation effort that integrated process, technology and organizational changes to align all facets of the operation with an important business strategy change. Afterwards, the client thanked our team by saying “You saved our company.”
The second was with AmTrust, now NYCB Mortgage Banking, where we designed a path for them to increase their emortgage production from 20 per month to 5,000 per month. Our work outlined significant changes that were needed to process and policy and was ultimately very successful because what we were doing had strong support from the client’s business leadership.
In 2011 you earned your Certified Mortgage Banking (CMB) Designation from the Mortgage Bankers Association. Can you tell us about that experience and what it has meant to your work?
I am embarrassed that I waited that long to get my CMB. A career in consulting, working with everything from broker origination to Wall Street securitization gave me a broader background than most people have to become a CMB, so I think it was easier for me than for some.
There aren’t many CMB’s, so it distinguishes you at a client as “this is someone who can help me with my business.”
The CMB program isn’t something that is “one and done.” I continue to be very involved in the program, including participating in evaluating new candidates. This ongoing engagement helps you keep up with changes going on in the industry, and provides insights into different perspectives on those changes.
Finally, especially since I live in the Washington, DC area, a CMB gives you the opportunity to give back to the industry by educating legislators.
In your 30-plus years in the mortgage industry, what have been the three biggest changes?
The first change was the switch to the agency securitization model and the rise of the mortgage banking model over the S&L (Savings and Loan) model. This was happening just as I started and drove CC Pace’s initial growth.
The second has been the adoption of technology, where I think automated underwriting really paved the way, and the shift in thinking from being an expense to being part of a business strategy. This trend was our bread and butter for years.
Finally, right now, the intense regulation of the industry that has resulted from the meltdown and the abrupt shift from consolidation to deconsolidation. Lenders are still processing what TRID means, and now HMDA and the new 1003 are coming, and what it means to them in their consumer channel.
What is one of you favorite memories from your time here at CC Pace?
A major highlight was about 10 years ago when we had the good fortune to work with Rob Thomsett to advance leadership in Agile Project and Program Management. Rob is an Australian Agile guru whose approach to how we should think about defining, managing and measuring the success of projects has been a game changer for me and many of us at CC Pace.
In addition, since I mainly work at client sites, my fondest memories are compliments from those clients about how we have helped them to solve their business problems and improve their processes.
What do you see as the next major technology advancement in the mortgage industry?
I don’t think the next advancement is a new technology – I think that there is plenty of exciting technologies that aren’t fully utilized. I think the next advancement will be to integrate the existing technologies into the overall value proposition of the business, to improve the customer and user experience, and better address the cyclical nature of the business.
Bill is not all business either, he and his wife have been known to cut the rug with great enthusiasm as competitive swing dancers. Maybe he can show you a move or two if you run into him in Boston later this month at the MBA’s Annual Conference.