Project Management

Owner Builder Lessons for the Project Management Industry

Owner builder residential construction projects offer a terrific point of comparison from which businesses can learn volumes about effective (or ineffective) project management strategies and techniques.

Owner builders are individuals who wish to save a lot of money by eliminating the costs of hiring a general contractor. Therefore, owner builders manage the construction of their own homes. They don’t necessarily have to do any of the labor themselves to be official owner builders. But, owner builders must oversee the planning and construction.

Because owner builders are often inexperienced in many aspects of residential construction, let alone project management, it is easy to take some invaluable lessons from owner builder construction and apply them to business project management.

Owner builders make many basic mistakes. Learn from them to refresh yourself on some project management basics.

1. Owner builders often underestimate the amount of time required for their construction project. What’s the lesson here? Always add an extra 15% to your project timeline to create a safety buffer.

Most owner builder construction loans provide a minimum of twelve months for owner builders to get their home built. Yet, most owner builders think they are going to be completed with construction within six to nine months.

Unfortunately, it is not uncommon for owner builders to blow their timeline and often use more than the typical twelve months allotted in the owner builder construction loan.

Of course, the timeline error is due to other management errors that occur during the construction project, but the lesson remains valid. Just like owner builders should overestimate the amount of time needed for a project, so should anyone professionally involved in the project management industry.

2. Owner builders constantly fail to underestimate the importance of the planning phase of a project. Similarly, anyone involved in project management should regularly remind themselves that the project planning is more often than not just as important as the actual execution of the project.

Owner builders typically fall into the trap of wanting to rush through their planning and budgeting in order to get to the physical construction of the home. Unfortunately for the owner builder, this means that they have no accurate budget numbers and no sub-contractors lined up to build their house.

It sounds basic and simple. It is basic and simple. For the owner builder who makes this mistake, he will lose precious time and money during the actual project as he scrambles to find any sub-contractor who will do the required work.

If the owner builder had taken the time during the planning phase, he would already have the sub-contractor lined up and under contract. There would be no scrambling. There would be no desperate hiring of under-qualified, over-priced sub-contractors at the last minute.

Think about how this owner builder example applies to any project. It doesn’t matter if it’s residential construction or any other project management field. The planning phase is as important as the execution phase. Your time is well spent during the planning. If you enter the execution phase properly prepared, you will save yourself time and money.

It’s true for owner builders. It’s true for you.

3. Owner builders often make the mistake of failing to thoroughly inspect the work of sub-contractors. In the project management industry, you live and die by your follow-up and inspection of the work that is being done.

One of the ways in which owner builders fail to properly inspect their sub-contractors’ work is that they don’t do a secondary follow up after some time has elapsed after the initial completion of labor.

For example, an owner builder may think he’s doing a good job of managing his construction project by inspecting the work of his plumber once the rough plumbing has been completed. If the plumbing checks out okay, the owner builder will often make the mistake of paying the plumber in full.

However, what happens once the HVAC mechanic goes to complete his portion of the work? What happens when he finds plumbing errors that the owner builder didn’t find? If the plumber is already paid in full, it is almost impossible for the owner builder to get the plumber back out on the job site.

Therefore, all owner builders would save themselves a lot of heartache if they did a secondary inspection after their initial inspection. Think of it as a double follow-up. By waiting an appropriate amount of time to perform the secondary inspection, you give yourself (and other people on the job) a chance to find any flaws that may have been initially missed.

Thus, before you mark a specific phase or evolution as complete, wait an appropriate amount of time. Perhaps you shouldn’t call a particular phase complete until the subsequent phase is satisfactorily in progress, showing no ill effects from the first phase.

Overall, the mistakes that owner builders make are very simple. Thus, the project management lessons are pretty basic. Yet, they’re vital. Owner builder construction is a great way to refresh yourself on the core basics of successful project management.

Chris Esposito helps owner builders manage the construction of their homes and save money by cutting out the costs of a general contractor. Through the Owner Builder 101 program, he provides the nation’s premier owner builder construction loans. Learn more at www.OwnerBuilder101.com.

7 Reasons Why Six Sigma Benchmarking Efforts Fail

Six Sigma Benchmarking projects are structured and systematic, concentrating on superior performance at the end of the project.

The success of each benchmarking project is dependent on the participation of all the parties involved. The involvement and the commitment of senior management are necessary for projects to achieve their objectives.

Six Sigma project efforts are bound to fail if teams do not understand the areas of concern for internal processes, or management does not support them properly.

Various reasons why the benchmarking efforts of some companies fail are listed below.

1. Lack of understanding: The key factor for Six Sigma benchmarking failures is the lack of understanding of internal processes and the mission and the goal of the organization. If management does not align the activities with the mission statement of the organization, then all efforts will be wasted.

The failure to understand the needs of the customer, the outcomes of the processes and the performance of the process is responsible for efforts failing.

2. Lack of sponsorship: Unless there is acceptance of the Six Sigma project and its objectives and potential costs by management, any improvements made may prove useless.

Team leaders may not accept the improvements for lack of understanding.

3. Unfamiliar Teams: If the members of the team are not familiar to the process or the area under consideration, they may not be able to understand the minute details of the process and its relevance to the success of the project. The members of the team should be people who have experience in the working of the process.

If team members are unable to compare the processes of the two organizations in the correct light, then they will not be able to find and come up with good improvements to the project.

4. Too much work: If teams decide to cover a broader area, they will soon find it unmanageable to carry out the project systematically to its logical solution.

By making simple flowcharts, breaking down the projects and having a logical approach to Six Sigma project selection, the team will be able to contribute positively to the project.

5. Lack of commitment: If managers are not well informed about the pros and cons of the projects, they will underestimate the effort, in terms of time and cost, needed for the successful completion of the project.

A lack of commitment of top management to support the project in its entirety means sure failure of the Six Sigma benchmarking project.

6. Focus on metrics rather than processes: Some organizations tend to focus on performance metrics rather than the overall processes.

If the other organization has high returns due to certain reasons, then a study of your organization processes is necessary in order to understand its drawbacks and improve upon them to achieve the benchmarks.

7. Failure to monitor process progress: If the teams have completed analysis and implementation of the changes to any process, management should monitor its progress on implementation.

By failing to monitor results over a longer period of time, the benchmarking project will surely fail.

The failure of benchmarking efforts can be overcome by planning the Six Sigma project carefully. Projects must be managed and coordinated well among the team members by the active participation of senior management.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Guidelines For Six Sigma Healthcare Project Selection

Customer satisfaction (i.e. the satisfaction of the patients) is of utmost relevance to any healthcare organization. It is not restricted to giving proper treatment, but involves other services such as billing systems, availability of rooms and so on.

It becomes imperative to select a Six Sigma project that would bring about substantial improvements in critical services.

Prioritizing Activities

Potential Six Sigma projects for healthcare organizations may be related to the workflow of the registration and billing systems, the clinical procedures of medication administration or Intensive Care Unit procedures. All these activities are relevant – but all of them cannot be improved simultaneously.

Prioritizing and selecting areas that need immediate improvement is critical to the success of the Six Sigma project. A few guidelines should be followed when selecting Six Sigma projects in a healthcare organization.

When prioritizing the appropriate project, significance has to be given to customer requirements first. The critical to quality (CTQs) elements for the project have to be understood. The customer need not be the patient only; it can also be nursing staff, physicians and administration or department heads as well.

Equally important is to understand the complex nature of the problem. The higher the complexity with measurable response variables, the better the prospect for a Six Sigma project. Some problems may be sorted out by using other tools like CAP (Change Acceleration Process) and Workout, which can be applied to cases that simply need direction and facilitation.

Common Characteristics

Typically, for Six Sigma project selection, there has to be identifiable input and output of the processes. Some common characteristics of Six Sigma projects are the feasibility of resources and data, clearly defined goals, alignment of critical hospital issues and visible benefits of the initiatives to customers. There also has to be a considerable improvement on implementation of the project.

The QFD (Quality Function Deployment) tool can be effectively used to gain agreement on the best area for the Six Sigma improvement. By carrying out interviews and surveys, the data can be collected and the CTQs determined.

When the data is collected, the Six Sigma team has to determine the problem area (which can be controlled) and the solution that would be to the benefit of the organization. If a simple project that can show some quick results is undertaken, it can help bring about more support and provide a thrust to further initiatives.

By choosing something that is time-bound, the project solution will become more meaningful and long lasting. The effort and results can be sustained over a longer period of time. Additionally, if it is not of a controversial nature, which may lead to layoffs, then the change may not face much resistance.

By using a prioritization matrix, the CTQs can be weighed and the critical functions taken up for improvement.

Healthcare organizations should work on selection of the proper Six Sigma projects, those that will power measurable benefits for the organization. Depending upon the needs and priorities of each organization, they should select the project accordingly and bring about changes that will help provide the best services to customers.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Aligning Six Sigma And Healthcare

Technological developments are happening at a brisk pace, overtaking existing systems and educational developments.

The ever-increasing demand in this sector has had negative impact, leading to overcrowding of hospitals and customer complaints.

Main Objectives

The Six Sigma methodology aligned with the healthcare sector is a very good option to bring about process improvements with quick results. Improvements are required in common areas such as cost management, service provision and quality of clinical services in healthcare organizations.

The major objectives of quality healthcare relate to safety of patients, quality services for patient happiness and reduced turnover of staff by providing good working conditions. Sufficient operating margins are also a main goal.

For example, in critical areas, such as the operating room and the entire process of surgery, there may be issues such as pre-op delays, unavailability of surgeons, anesthetists and even some equipment. In these cases, a Six Sigma project that applies the lean concept to pre-op process can bring about major improvements.

The safer and more efficient the emergency department is, the more patient satisfaction will increase.

Using Kaizen events to monitor equipment or replenish supplies and staffing schedules for medical staff are some of the tools of Six Sigma that can be very useful. In some cases, problems regarding the availability of rooms and support staff at hospitals arise.

In this scenario, scheduling processes done using the Six Sigma methodology can prove effective. It helps by reducing defects and medical and prescription errors.

Training, Commitment and Leadership

In the healthcare environment, the management of processes and information is challenging. There is a lack of usage of data in a meaningful way. With lives on the line, hospital administrators tend to concentrate on finding urgent solutions – and the real issues or causes of problems may be forgotten or ignored.

Six Sigma defines formal goals for healthcare organizations and the timeline to bring them into force. Well-defined goals are connected to organizations’ performance measures.

For a successful implementation of Six Sigma projects in health care organizations, commitment of management and Six Sigma training, coupled with a long-term vision, are necessary. The commitment of top-level management has to be communicated to the lowest levels of the organization and Six Sigma training imparted to the members. The cost of Six Sigma training is justified when the results of the first projects show breakthrough results.

In this way, process effectiveness improves, and the reduction in defects and waste brings about savings for the organization as well. Frequent communication of performance helps ensure that everyone connects to the overall goals, be it nursing, housekeeping, billing, administration or any other area.

Six Sigma initiatives help increase patient care and satisfaction, physicians’ satisfaction and bring about cost savings that leads to stronger growth of the organization. Each healthcare organization has its own set of distinct requirements, so there is not a one-size-fits-all solution for the healthcare sector.

Healthcare organizations can learn from the best practices of the other organizations and use the appropriate Six Sigma approach that fits their specific culture and concerns. They can then live up to their commitment to provide the best services to the community.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Merging Six Sigma And The Balanced Scorecard

These activities of Six Sigma projects are aligned to organizational objectives. Properly developed strategies, which are built up by listening to the voice of the customer, are better constructed to suit customer requirements.

The Balanced Scorecard Explained

The Balanced Score Card is another tool that helps organizations to focus on various aspects of the business while providing a complete appraisal of the progress of the organization. Employees can concentrate on improving the performance of their area of work without affecting or damaging the other related sectors of the organization.

The Balanced Score Card requires employees to convert their organizational goals to performance metrics. They have to connect these aspects to the customer’s view of the organization, the internal processes of the organization, the continual improvement of the organization and the financial aspect from the shareholders’ point of view.

Both Six Sigma and the Balanced Score Card are tools that rely heavily on the metrics for improvement efforts in the organization. Integrating the two can be beneficial in bringing about even more focused efforts by Six Sigma leaders on overall organizational performance.

Additionally, both the methodologies rely on accurate data and on metrics to communicate the progress route and the objectives. Balanced Scorecard allows for performance metrics to be labeled with red for poor, yellow for mixed results and green for excellent results.

These ratings can help Master Black Belts and Black Belts isolate areas that need immediate attention. They can initiate projects to impact these poorly performing areas. The areas with red ratings require immediate and urgent work to be done for their improvement. Their poor performance can have an undesirable impact on other areas of the organization.

The Balanced Scorecard becomes a powerful tool for Six Sigma project leaders to prove the need for change in the processes in these areas.

Employee Participation

Understanding these key areas helps employees understand and develop strategies for their improvement. The ratings can motivate employees to play a role in their improvement and sustain them for longer periods. They will also be able to appreciate the impact of their efforts on the betterment of the area of concern – and in turn, the continued growth of the organization.

Employees’ active participation in Six Sigma initiatives often has a positive impact on the pace of the improvement effort, with less resistance to change.

This provides the mechanism for steering the organization’s alignment and maintaining balance across the enterprise. The statistics provide the most critical to quality aspects for the Six Sigma teams to focus their efforts on improvement.

The integration of Six Sigma and the Balanced Scorecard is one solution that will help organizations to align strategic objectives with a clear measurement of impact on the activities and the growth of the business as well as stakeholders.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.