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THE FAST FORWARD MBA IN PROJECT MANAGEMENT SIXTH EDITION THE COMPREHENSIVE, EASY-TO-READ HANDBOOK FOR BEGINNERS AND PROS ERIC VERZUH Copyright © 2021 by Eric Verzuh

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THE FAST FORWARD MBA IN PROJECT MANAGEMENT SIXTH EDITION THE COMPREHENSIVE, EASY-TO-READ HANDBOOK FOR BEGINNERS AND PROS ERIC VERZUH Copyright © 2021 by Eric Verzuh. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. 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Library of Congress Cataloging-in-Publication Data is available: ISBN 9781119700760 (Paperback) ISBN 9781119700791 (ePDF) ISBN 9781119700807 (ePub) Cover Design: Wiley Cover Image: © Wiyada Arunwaikit/Getty Images 10 9 8 7 6 5 4 3 2 1 For Marlene CONTENTS ACKNOWLEDGMENTS ABOUT THE AUTHOR PREFACE xiii xv xvii PART 1 INTRODUCTION CHAPTER 1—PROJECT MANAGEMENT: A PLATFORM FOR INNOVATION A Timeless Leadership Toolset Project Management Is Keeping Pace with Global Change Project Management Is an Essential Leadership Skillset Successful Projects Deliver Value The Art and Science of Project Leadership A Practical Checklist for Successful Projects: How This Book Will Help You Beyond the Book: Tools for Application and Continuous Learning End Point Stellar Performer: OrthoSpot Stellar Performer: PM4NGOs CHAPTER 2—PROJECT LEADERSHIP: PEOPLE BEFORE PROCESS The Project Leadership Challenge Build a Team Culture Suited to a Journey of Discovery Temporary Teams Form Before They Perform Build Personal Authority and Influence Project Leaders Need Political Savvy Your Decision to Lead End Point iv 2 3 4 5 6 6 8 12 13 14 15 16 17 19 21 24 25 26 28 Contents CHAPTER 3—FOUNDATION PRINCIPLES OF PROJECT MANAGEMENT Projects Require Project Management How a Project is Defined The Challenge of Managing Projects The Evolution of a Discipline The Definition of Project Success Project Management Functions Project Life Cycle Organizing for Projects Project Managers Are Leaders End Point Stellar Performer: Seattle Children’s Hospital and Regional Medical Center CHAPTER 4—AGILE AND WATERFALL: CHOOSE A DEVELOPMENT PROCESS Defining Value: A New Lens for Judging Projects Informs the Development Process Choose a Product Development Process That Delivers Value Best Practices for Capturing Requirements Are Integrated into a Product Development Process A Development Process Is Not Project Management Waterfall or Agile: Which Delivers the Best Value? Common Agile Practices Common Agile Benefits Choosing Between Agile and Waterfall Development Innovation Projects Experiment to Discover Desirability and Viability Product Development Methods Influence Project Management End Point Stellar Performer: The Lean Startup Innovation Movement 29 29 30 31 32 36 38 40 43 44 45 46 51 52 53 57 58 58 63 65 67 69 70 71 72 v Contents PART 2 DEFINING THE PROJECT CHAPTER 5—PROJECT INITIATION: TURN A PROBLEM OR OPPORTUNITY INTO A BUSINESS CASE Project Initiation’s Place in the Project Life Cycle A Mini-Analysis Phase or a Complete Project The Role of a Project Manager in Project Initiation A Business Case Defines the Future Business Value Business Risk and Project Risk Managing Requirements Is Tightly Linked to Project Initiation Common Principles for Project Initiation Project Selection and Prioritization Basic Business Case Content Designing a Realistic Initiation Process Project Leadership: Focus on Value End Point Fast Foundation in Project Management Stellar Performer: The Logical Framework Approach CHAPTER 6—ENGAGE YOUR STAKEHOLDERS AND WIN THEIR COOPERATION Stakeholder Focus Throughout the Life of the Project Stakeholder Management Is Risk Management for People Stakeholder Roles on Every Project Stakeholder Roles: Project Manager Stakeholder Roles: Project Team Stakeholder Roles: Management Stakeholder Roles: The Customer Affected Stakeholders Can Make Crucial Contributions Engage Affected Stakeholders vi 78 79 79 80 81 82 82 84 89 90 94 94 95 95 96 105 106 108 109 109 110 111 114 116 118 Contents Lead the Stakeholders End Point Fast Foundation in Project Management CHAPTER 7—WRITE THE RULES: MANAGE EXPECTATIONS AND DEFINE SUCCESS Project Rules Are the Foundation Publish a Project Charter Write a Project Charter Responsibility Matrix End Point Fast Foundation in Project Management 118 119 119 121 122 124 126 134 136 138 PART 3 THE PLANNING PROCESS CHAPTER 8—RISK MANAGEMENT: MINIMIZE THE THREATS TO YOUR PROJECT All Project Management Is Risk Management The Risk Management Framework Step One: Identify the Risks Step Two: Analyze and Prioritize the Risks Step Three: Develop Response Plans Step Four: Establish Contingency and Reserve Step Five: Continuous Risk Management Unexpected Leadership End Point Fast Foundation in Project Management CHAPTER 9—A WORK BREAKDOWN STRUCTURE MAKES A PROJECT MANAGEABLE Defining the Work Breakdown Structure Building a Work Breakdown Structure Criteria for a Successful Work Breakdown Structure Work Package Size When Very Small Tasks Make Sense Planning for Quality Breaking Down Large Programs 143 145 147 149 153 159 165 166 167 168 168 170 171 175 177 181 182 183 184 vii Contents Contractors or Vendors Can Provide a WBS End Point CHAPTER 10—REALISTIC SCHEDULING Planning Overview Planning Step Two: Identify Task Relationships Planning Step Three: Estimate Work Packages Planning Step Four: Calculate an Initial Schedule Planning Step Five: Assign and Level Resources Small Projects Need Smaller Plans End Point Fast Foundation in Project Management CHAPTER 11—MANAGE AGILE DEVELOPMENT WITH SCRUM Scrum Is a Framework Scrum at a Glance Managing the Product Backlog Make the Plan Visible: Task Boards and Burndown Charts Key Factors for Scrum to Be Effective Scrum and Project Management End Point CHAPTER 12—THE ART AND SCIENCE OF ACCURATE ESTIMATING Estimating Fundamentals Estimating Techniques Building the Detailed Budget Estimate Generating the Cash Flow Schedule End Point Fast Foundation in Project Management Stellar Performer: Tynet, Inc. CHAPTER 13—BALANCE THE TRADE-OFF AMONG COST, SCHEDULE, AND SCOPE Three Levels of Balancing a Project Balancing at the Project Level viii 185 186 188 189 190 195 201 208 220 221 222 223 225 225 230 232 235 236 236 238 239 245 255 262 263 264 265 269 270 271 Contents Balancing at the Business Case Level Balancing at the Enterprise Level End Point Stellar Performer: Seattle Mariners Baseball Park Stellar Performer: Boeing 767-400ER Program 287 291 CHAPTER 14—MANAGING CREATIVE PROJECTS: INSIGHTS FROM MEDIA AND ENTERTAINMENT 294 Lessons from Film, Television, and Video Production Lessons from Creating Video Games Lessons from Music Production Learning to Manage Media, Entertainment, Technology, and Art (M.E.T.A.) Projects End Point Stellar Performer: Flexible Life Cycle Transcends Industries 281 285 286 295 299 302 305 310 311 PART 4 CONTROLLING THE PROJECT CHAPTER 15—BUILD A HIGH-PERFORMANCE PROJECT TEAM 314 A Framework for Building High-Performance Teams Leadership Responsibilities Building a Positive Team Culture Ground Rules Team Identity Team Listening Skills Meeting Management Collaborative Problem-Solving Problem Analysis Decision Modes Conflict Management Continuous Learning Job Satisfaction 318 323 324 325 326 331 335 337 338 340 345 348 353 ix Contents End Point Fast Foundation in Project Management Stellar Performer: Habitat for Humanity CHAPTER 16—COMMUNICATE WITH PROJECT STAKEHOLDERS Embrace Your Role as a Leader Creating a Communication Plan Communicating Within the Project Team Virtual Teams Benefit from Formal Communication Closeout Reporting End Point Fast Foundation in Project Management Stellar Performer: Lockheed Martin Aeronautics CHAPTER 17—CHANGE MANAGEMENT: ENGAGE YOUR STAKEHOLDERS TO MAXIMIZE VALUE Why the People Side Matters Outcomes Desired: Individual Change Management Using ADKAR Actions Required: Organizational Change Management Roles: Who Does Change Management End Point CHAPTER 18—CONTROL SCOPE TO DELIVER VALUE The Change Control Process Configuration Management Change Control Is Essential for Managing Expectations End Point Fast Foundation in Project Management x 353 354 355 357 358 358 365 371 374 375 376 377 381 382 385 389 391 392 393 394 400 402 402 402 Contents CHAPTER 19—MEASURE PROGRESS Measuring Schedule Performance Measuring Cost Performance Earned Value Reporting Escalation Thresholds Cost and Schedule Baselines End Point CHAPTER 20—SOLVE COMMON PROJECT PROBLEMS Responsibility Beyond Your Authority Disaster Recovery When the Customer Delays the Project The Impossible Dream Fighting Fires Managing Volunteers End Point 404 404 409 411 419 421 423 425 425 426 427 428 429 429 430 PART 5 ADVANCING YOUR PRACTICE OF PROJECT MANAGEMENT CHAPTER 21—ENTERPRISE PROJECT MANAGEMENT: ALIGN PROJECTS WITH STRATEGY Defining Enterprise Project Management Three Tiers of Management Within EPM: Portfolio, Program, Project The Four Components of EPM: Process, People, Technology, PMO Establish Consistent EPM Processes Technology Enables EPM Processes The People Who Deliver Projects Support Project Management: The Project Management Office End Point Stellar Performer: Bill & Melinda Gates Foundation 433 435 436 440 441 444 447 448 456 458 xi Contents CHAPTER 22—REQUIREMENTS: DESCRIBE THE SOLUTION TARGET Requirements and Project Management Are Intimately Connected Requirement Types Illustrate the Evolving Product Vision Requirements Scope and Processes Requirements Development Activities Requirements Management Activities The Audience for Requirements End Point CHAPTER 23—USE THE QUALITY DISCIPLINE TO HIT THE TARGET The Cost of Quality Build the Quality Discipline into a Project Quality Assurance and Quality Control Quality Practices Improve Requirements The Quality Discipline Improves Processes Quality Is an Organizational Commitment End Point CHAPTER 24—PASS THE PMP EXAM Requirements to Earn the PMP Top 10 Study Tips for the PMP Exam End Point APPENDIX A: FORMS AVAILABLE ONLINE APPENDIX B: THE DETAILED PLANNING MODEL NOTES INDEX xii 465 466 467 469 471 474 476 478 480 481 483 485 487 488 490 491 493 494 494 497 498 499 508 511 ACKNOWLEDGMENTS P roject management remains a dynamic field, moving forward through the accumulated effort of many thousands of professionals who face new, interesting challenges and then generously share their lessons learned during conferences, at trade shows, through associations, and over coffee with friends. I have the privilege to both travel with the project management movement and to record the journey. To all of the project teams and project leaders who continue to innovate and move the state of the art forward, I wish to thank you for your example and the freedom with which you share what you learn. There are, of course, particular friends and colleagues who made a direct contribution to this sixth edition, and to whom I owe particular recognition. Tim Creasey and Karen Ball enthusiastically accepted my invitation to contribute their expertise on change management, the practices that motivate employees to change their behavior in support of project goals. Tim, Karen, and their colleagues at Prosci are building a body of research in this field and are tireless advocates of the value of change management on projects. It is an honor to have their cutting-edge practices included in this edition. Lester Frederick challenged me to think outside the normal boundaries of this book and was a tireless collaborator as we created a new chapter on the project management insights that can be taken from music, film and TV, and video game projects. His amazing network of accomplished industry veterans generously offered their xiii Acknowledgments insights, which was a great learning experience for me. Thank you to Brandon Egerton, Cordy Rierson, Grant ­Shonkwiler, ­Jonathan Feist, DJ Swivel, Stewart Lyons, Jeremy Schmidt, Matt Scura, Michael Cardwell, and Heather Chandler. Lester and I also thank these Full Sail University faculty, staff, students, and alumni for their support and expertise: Heather Torres, Dave Franko, Stephanie Dawson, Jay Noble, Victor Herrera da Silva, and Jacob Herring. Mandy Dietz epitomizes the synthesis required to effectively lead projects. She long ago mastered the science of project management, and she is expert at integrating additional concepts from process management and leadership. Mandy contributed her considerable expertise on collecting and managing requirements to make a substantial revision to the requirements chapter and was a valuable sounding board on the new chapter on quality. Donna McEwen has a gift for translating her substantial leadership experience into practical advice in a manner that is constantly engaging. She is a trusted sounding board and creative collaborator. Donna ensured the new content on leadership, quality, and agile versus waterfall development stayed relevant to project managers. Tony Johnson has generously contributed his expertise on the PMP Exam since the third edition of this book. I appreciate his friendship and collaboration. Spencer Lamoreaux is a gifted facilitator and IT leader for a major technology company. He offered his considerable expertise on agile practices as a valuable sounding board. What could be more satisfying than for a father to learn from his children? I wish to thank Dan and Jack for sharing their professional experiences, which influenced the chapters on agile and leadership. At the risk of missing other friends and colleagues who spent time discussing this edition, I wish to recognize several who made valuable suggestions: Ernie Baker, Dale Christenson, Vicki L ­ egman, Andrew Schlam, Renee Adair, Mark Caudle, Tim Cermak, Karl ­Croswhite, Clint Gradin, Bill Holt, Franklin Sarigumba, Bill Warner, and Steve Weidner. Richard Narramore and Mike Campbell, my editors at John Wiley & Sons, are energetic supporters. Twenty-three years ago, an editor at Wiley took a risk on an unpublished author. I am very grateful for the opportunity that Wiley provides and the partnership that ­continues. My wife, Marlene Kissler, again played the critical role of sounding board and editor. This book is readable because she reads it first. My parents, Julie Welle Verzuh and Jim Verzuh, enriched my life with their love and friendship. I miss them. xiv ABOUT THE AUTHOR ERIC VERZUH Eric Verzuh is president of The Versatile Company, a project management training and consulting firm based in Seattle, ­Washington. His company trains thousands of professionals every year in the fundamentals of successful project management, including how to pass the Project Management Professional (PMP®) Exam and how get the most out of Microsoft Project. Versatile’s consulting practice focuses on helping firms establish consistent, practical methods for managing their projects and implementing Microsoft’s enterprise project management solution. The company’s client list includes large corporations as well as government agencies, small ­companies, and nonprofit organizations. Verzuh has been certified as a Project Management Professional (PMP) by the Project Management Institute. He is a founding board member of Project Management Training Alliance (PMTA) and a founding board member of PM4NGOs, a nonprofit organization committed to promoting project management in developing countries. His other publications include articles, conference papers, and The Portable MBA in Project Management (2003), also published by John Wiley & Sons, Inc. Verzuh can be reached via his company’s website at www .VersatileCompany.com, or you can e-mail Eric directly at EVerzuh @VersatileCompany.com. xv PREFACE G lobal turbulence from a pandemic, economic upheaval, revolutionary innovation, and environmental crisis underscore the need for both pragmatic and visionary leadership in a world of constant change. Work is increasingly accomplished through temporary networks. More than ever, organizations need leaders who can synthesize facts and assumptions to set a direction. Project management, a set of critical thinking and communication tools, is the right discipline for this moment. This sixth edition retains the book’s primary focus on excellence in project management, including a new chapter on the project manager’s primary responsibility as a leader of diverse stakeholders. Two other new chapters address the disciplines of quality and change management. Both of these topics have their own certifications and extensive bodies of established theory. Both should be familiar to any working project manager. The actual practice of project management continues to evolve. Agile concepts and frameworks have had a substantial impact and are included in many chapters. A new chapter draws insights from film, music, and video game projects, capturing the contribution of project management to these highly creative efforts. Two chapters have been substantially revised to reflect current practice and to make them more practical and easier to read. Chapter 4 addresses agile and waterfall development and Chapter 22 addresses collecting and managing requirements. xvii Preface A substantial new feature is the inclusion of instructional videos. Many of these animated videos are specifically directed at the reader considering Project Management Professional certification. The Project Management Institute has changed the focus and format of their Guide to the Project Management Body of Knowledge to emphasize principles rather than detailed processes. The principles in their seventh-edition guide are consistent with this book. I have been teaching and writing on project management for over 30 years. My experience is that project managers are optimists, pragmatic problem solvers, and team-oriented servant leaders. It continu...