About 7 years ago a data aggregator of pharmaceutical information asked a large consulting firm to help it develop 10 new products in the same year, using the same resource pool (mostly engineers). I was assigned to help craft a solution for the consulting company’s RFP. Unfortunately, the initial conversations with the client involved a PMO (Program Management Office) solution. Too bad, because I had seen this problem before. For this problem, project management is the wrong paradigm.

Years earlier, I had worked on a 350 person software project. I worked in Best Practices and had built an automated PM management toolset for large, multi-site projects, based on workflow. Everyone on the project had electronic work-queues that were updated dynamically. However, the client was obsessed with project plans and imposed granular PM plans that were updated weekly by 60 to 70 team leaders. Administrators performed data entry and quality assurance. PM tool experts rolled up the plans. Senior planners and PM management reviewed high-level plans. Naturally the two systems didn’t integrate.

I came to the conclusion that resource management, not task management, is the sanest and most cost effective paradigm for large projects or many simultaneous projects. I even spent time designing a resource planning tool that would replace project management tools. It drew upon manufacturing concepts of highly automated, robotic shop floors, to come up with a flexible, dynamic system for allocating work to the appropriate resources. In addition, a new project could be introduced into an existing resource pool as a scenario to determine the impact on resource utilizations. I would have gladly given my design away to anyone who would eliminate the use of Microsoft Project for anything other than simple projects.

Back to writing the RFP, I proposed the best PMO solution I could, but the client was bright. They were looking for a creative, non-administrative solution. Finally, someone has done it.

Today, I read an interesting article about IBM’s workforce optimization efforts started in 2004, and specifically the article discusses deploying a human supply chain solution for all 320,000 employees. It saved $1 billion in 2005.  IBM Article

All employee skills are kept in a single database, and sourcing is manageable at the enterprise level. Anyone who has worked in large consulting firms knows that typically human resources are controlled at a geographical level or at a practice level, which can be based on an industry (Insurance), a technology (Peoplesoft), or a methodology (Financial Best Practices). Good people are underutilized or terminated even though demand for their talent exists in other practices or geographies. One hand doesn’t know what the other hand is doing.

IBM, with its human supply chain solution, has increased the speed of sourcing and improved utilization by 5% to 7%. IBM discovered a few cultural nuances.

First, they made the mistake of using hardware and parts vocabulary to describe the solution. People felt a little like keyboards. So using a manufacturing paradigm was the genesis for the solution (I stumbled on the solution the same way), but it was a lousy paradigm for communicating the change throughout the organization. Unlike hardware that is either used or it becomes obsolete, people can change and grow.

Second, the project’s completion had a positive effect on morale and the company’s culture. Now, skills are more highly valued inside the company (previously deployment depended on who you knew and who knew your capabilities). Skill-based assignments mean that people are assigned work based on their highest-valued skills, and outsourcing is used for more mundane, commodity skills. This increase in morale is consistent with the literature on culture: people feel better about their jobs the more frequently they use their highest valued skills.

In general, companies too often rely on mechanistic solutions, instead of increasing people’s commitment and intentions. These mechanistic solutions usually create disappointing results. Here however, IBM solved a nagging people problem with a mechanistic solution that worked out well for employees, the culture, and the bottom line. Congratulations!

My wish is that other project-based firms will follow IBM’s lead and shift the solution space from task management to resource management. The more that companies recognize the value of people’s skills, the better.

Keywords: organizational change, corporate culture, engaging change, workforce optimization, change leadership

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Michael Cushman, The Engaging Guru, wants you to master enrolling others in your truth, get the goodies of life, and change the world.  www.engagingchange.com