Issues

Issue: Work Is Performed In One Country And Then Sent To Another Country For Finishing

This is a natural way of doing business in many industries. Examples are the clothing and garment industry, the software industry, and manufacturing. When you look at this issue, you may be tempted to say “So what?” After all, that is the way life is. True. However, you can examine the situation and make a stab at determining potential issues that will arise due to the situation.

Impact

When work is handed off from one organization to another, there are bound to be discrepancies and disagreements as to what was shipped and what was received. This is natural. If you are doing a project in such a situation, you should identify potential issues in the handoff. You may want to create a separate subproject that deals with the interface between the departments or locations. This will draw attention to the handoff and surface issues earlier.

Prevention

Setting up a separate subproject is one step. Another step is to involve the two locations in joint tasks to improve and facilitate the handoff. The important thing here is not to place blame for problems; it is to get the problems solved quickly. Issues related to interfaces should be tracked separately from other issues since they tend to be more severe in their impacts.

Action

Often, problems in handoffs are detected too late. It is this way in manufacturing where subassemblies are made by contractors in one country and then shipped to another country for final assembly. One automobile manufacturer had to delay the introduction of a new model because the radiator assembly was faulty. Unfortunately, this was not detected until over 50,000 vehicles had been produced. They all had to be mothballed until new assemblies were received and tested.

Issue: Management Expectations Are Centered Upon Headquarters With A Lack Of Attention To Local Needs

High management expectations are a leading cause of project failures. A project is more than the sum of its parts. Projects represent the culmination of a major effort in many different locations. Expectations are also often too vague to address in the project and so are ignored. In one company management thought that a new manufacturing method would revolutionize work around the world at 11 plants. However, in practice due to the varied activities of each plant, only 5 plants were ultimately affected by the project. The impact at these 5 was positive, but management viewed the project as a failure since there were no benefits at the other 6 plants!

Impact

The impact of high management expectations tends to create depression among team members. How can they live up to these? The project may be viewed as doomed at the start. Moreover, the project team can only do so much. It is often the management and employees of each location to take the work of the project and turn out the benefits. A critical success factor is to realize that it is the benefits that occur after the project is completed that count—more than the project itself. This is epitomized in the expression from medical science, “The operation on the patient was a success, but the patient died.”

Prevention

One sure way to deal with management expectations is to dampen them at the start. Issues can be raised to depress anyone. Next, expectations should be placed on the people who will use the results of the project—not the team. The team is responsible for completing the project on time and within budget. They are not responsible for changing the organization or culture in a specific country.

Action

If there are high management expectations during the project, the project leader should work to lower these and redirect them to the business units who will use the results of the project. This can be done by encouraging an additional project to be started to monitor how the results of the project are used.

Issue: The Project Is Approved Without Recognizing Other Projects And Efforts

In some companies, a high-level manager goes to a seminar, reads a book, or hears about some wonderful concept for a project. The manager returns to the organization and presses for the immediate start of the project. No one wants to take on the manager and explain that there are limited resources. So the project is approved. We have seen this occur again and again.

Impact

By introducing one more project, management may unknowingly not only undermine the new project, but also the current projects. All of the projects then suffer as resources are robbed from regular work and other projects. In one company the result was bankruptcy.

Prevention

This situation can be prevented by undertaking a review of all projects and new ideas for projects every 3–4 months. New ideas for projects can be suggested prior to this meeting and analyzed in terms of resource requirements. The resources in each location can then be assessed to see what level of resources can be brought to bear on all of the projects.

Action

If a new project is given a high priority, it will likely demand many already committed resources. So the first step is to assess the resource requirements of the new project. Then the current projects can be studied to see if any can be cancelled or deferred. A resource allocation method can then be performed to prioritize the work. If you just overlay the project with other work, the projects will start to be affected one at a time.

Issue: There Is A Lack Of Control Since The Project Is A Joint Venture

There are many instances where the operations in specific locations are jointly owned and controlled by several firms. These firms typically have very different cultures and methods of management. Managing a joint venture project is very challenging for these reasons. Since the project is being carried out by equal partners, it is very difficult to establish control. Instead, firms typically create coordination. Unfortunately, this is not the same as control. When actions are required, it may take too long to get decisions since each party must understand the situation and agree on what is to be done—a very tall order.

Impact

The joint venture sounded like a good idea. The problem was that little thought was given to how things other than daily work would be done. When confronted by a project, just getting the project started is a major challenge. In one such firm, it took 3 months to get any substantial project approved. Managers in the field quickly learned that they had to work informally and not call the work a project— to avoid the bureaucracy. The impact is that the work is driven underground.

Prevention

At the time a joint venture is established, the ground rules for projects as well as the daily management of work need to be established. It is recommended that several sample projects be dry run so that guidelines for projects can be set up. In one joint venture each partner firm supplied managers in alternate years. This sounded like a good idea in theory since it established formal authority. However, many problems arose. The cultures of the two firms were almost diametrically opposite. In one there was a formal structure; in the other managers were encouraged to be entrepreneurial. This led to differences in project reporting, control, and direction. If a project spanned the period of the end of the year, there were likely to be many changes to the active projects due to this major cultural difference.

Action

It is better to surface a number of smaller issues to the management of both firms than to wait until a major crisis arises. This will pave the way for better ways of addressing problems later. An active project can be used as an example and standardized reporting and review methods established.

Issue: The Company In One Country Is Jointly Owned With A Local Firm

A variation of the previous issue is the situation where an overseas firm must take on a local partner in order to operate in the country. This is often the case in Asia, for example. The potential problems in projects go beyond project management. In some cases, the local firm gains expertise and sets up a duplicate operation to make even more money by cutting out the foreign partner. In some countries it is difficult for the foreign firm to pursue remedies in the local courts. This indicates that firms should be very cautious when they embark on projects. At the heart of this is what expertise and knowledge is the foreign firm willing to transfer to the local firm?

Impact

If the project is started as a partnership like a joint venture, then there can be many cultural and political problems. The local firm may try to exert the final say on all issues. The foreign firm may seem helpless. The impact can be a failed project or one that just goes on and on. The foreign firm does not want to kill the project; the local firm gets money from the foreign partner. In one case, the obviously failed project went on for 3 years.

Prevention

The foreign firm must define the range of projects it is willing to undertake in terms of risk. Once this is completed, the next step is to define how the projects will be managed. Some specific questions include the following:

• What will be the role of the local firm?

• How will decisions be made?

• Can the project be broken down in phases so that the project can be changed or killed at the end of a phase?

• How much of the work will be performed locally?

• How many employees of the foreign firm will be involved in the project?

• How will the results of the project be managed?

• How will performance of the local firm be measured and tracked?

• How will decisions and issues be addressed?

Action

If there is a project underway and problems arise, there are only a limited number of options available. One is to kill the project. This is difficult, if not impossible, to do without loss of face. A second approach that we have employed is to change the direction of the project and scale it back. The project can be divided into local and foreign parts. The project then can be allowed to wilt away. If the project is very important, then an increased foreign presence in the project is warranted.

Issue: Management Approval Was Only Obtained At Headquarters Without Involvement Of Local Management

A project was formulated either at headquarters or in one of the locations of the firm. Staff at headquarters then take the project idea and develop a plan. However, they do so without the knowledge of local conditions or involvement of regional management. This actually happened in southeast Asia where a cement plant was conceived by bureaucrats in the country, giving the aid. The plant was then constructed along with docks and supporting facilities by the foreign government. It failed miserably. The climate in the foreign country was cold; the climate in the other country was very humid. The cement was produced and put on the dock. However, the ship to pick up the cement was delayed due to mechanical breakdowns. The cement hardened on the dock and the dock collapsed. Then the cement in the plant froze up. The plant was worthless.

Impact

What was a good idea turned out to be a bad idea when planned from headquarters. As the preceding example shows, the result can be total failure. More importantly, the experience puts a damper on any future projects.

Prevention

The best approach is to develop the plan as a collaborative effort between the local and headquarters management. Both local and headquarters goals need to be spelled out along with potential issues, roles, and issues.

Action

If a project gets started from headquarters and starts to go bad, one course of action is to kill the project. However, there is often too much invested in the project to do this. There is a lack of will. A better approach is to redirect the project toward local goals.

Issue: The Method For Managing The Project Overall Is Too Bureaucratic

In some companies projects are run tightly from headquarters. After all, this worked in the past before the firm expanded internationally. When you are dealing with one location, getting decisions made and dealing with bureaucracy can be tolerated. They are part of the job. When the project is international, then there are more problems. This happens in some construction and engineering projects.

Impact

The effect of the bureaucracy can lead to delayed decisions and issues hanging for months. The project gets bogged down. If the rules are not relaxed, then there are likely to be continuing problems. The project will fail.

Prevention

To prevent this problem it is essential to develop project guidelines and rules for international projects. There should be a side-by-side comparison of the rules for headquarters and for local projects. This will ensure that people are aware of the different rules. However, it goes beyond this. People selected for the project must be more flexible and not rigid. Often, this means that new people from outside the organization must be recruited since they are not “tainted” by the bureaucratic procedures. This method was followed by the East India Company and by most of the European powers in the nineteenth century.

Action

If a project is underway and is being buried under bureaucracy, then the entire project should be reviewed. The likelihood of failure should be determined and used as a club to get changes in project management.

Issue: The Manager Who Was Behind The Project Moves To A New Position

It is often the case that projects are started by one manager who may have been stationed overseas. The project idea was a good one. Work is proceeding on the project. Then the manager leaves. There is a vacuum. People at headquarters may not be aware of the project. They left it to the now departed manager to direct the work.

Impact

When the manager leaves, work in the project continues. Then issues arise and decisions are required. Requests for support are made to headquarters, but there is no one assigned to the project since it was going along OK. The project gets assigned on an emergency basis to a middle-level manager. This person lacks the authority to get decisions made on a timely basis. The project goes into a state of crisis.

Prevention

It is never a good idea to depend on one manager. The manager should endeavor to involve other managers and to establish a steering committee at headquarters to support the project. This will ensure that there are other interested and informed managers on hand. There should also be a transition if the manager is about to leave.

Action

In the event that a manager leaves, all of the projects that the manager was involved with should be reviewed. There should be visits to headquarters and the local locations as well to build communications and knowledge.

Issue: Management Appears To Lose Interest In The Project Due To Other Commitments

Many projects are started, but few finish. This is true of project management in general. It is even more true with international projects. Management at headquarters is subject to many demands on their time. If the project seems to running along without problems, it may be left alone. People may forget about the project due to other priorities and pressing issues.

Impact

If management loses interest, the project manager may begin to lose interest as well. This is more frequent when the project leader lacks experience in previous large projects. The project leader may begin to search for another job. The project team may begin to drift away from the project.

Prevention

How a project is to be managed and coordinated over an extended period of time must be defined at the start of the project. It should be assumed that management will lose interest. This is not a bad thing; it is a fact of life. The project support should come from the people who will benefit from the project results. That is, in the end, what keeps the project going. To maintain management interest, a useful approach is to keep feeding status and issues to managers.

Action

To rekindle management interest, the project leader can undertake to showcase some of the recent milestones of the project. This will create interest. This can be followed up by surfacing issues.