Why Projects are Failing

Warning!
Projects can go up as well as done, especially in the current economic storm.
Project management has been a big part of my business management career for the last 35 years. I attended my first course in project management in the early ‘70s. Since then I have accrued a large collection of practical theories that I would like to share, starting here with the bogey man of project management, Project Failure, how to avoid it.

GOAL!
Like all good team managers or players; Start by considering the goals!
Projects have 3 basic criteria by which they are measured. They are deemed to have failed if they do not meet the following simple success criteria:
• Deliver project within planned timelines – TIME
• Deliver project as per forecast budget – MONEY
• Delivering planned results – BUSINESS BENEFITS

Only around 30% of projects achieve all three facets of the Golden Triangle, especially the last one; Business Benefits, the project ROI, the business case justification, call it what you will.

Projects Delivered or abandoned?
Partly successful projects are deemed to be ‘delivered’, even if they fail on one or more of these criteria. According to Gartner this can account for 30% of projects. They also believe that 15% are wisely cancelled before the end, having failed outright to meet their original criteria. I can only surmise that this last group did not seek expert PM rescue advice to determine if they could pull it back from the brink or limit the damage. Instead, we will assume that these projects had a high certainty or potential for failure.

Thus, it raises the questions;

• Were they doomed from the start
• Did they lose direction or support on the way
• Were they really viable and therefore saveable
• Others. Discuss!
  

Very few projects that are struggling have the reporting visibility that allows executive management the knowledge and insight to determine their real status. There is a conspiracy of silence and misinformation that prevails, along with the belief that all is well, right up until they crash into the buffers. So, for the 15% of projects that fail, let us speculate that it should have been clear for some time that they were struggling and needed to be euthanised, if only we had known earlier. Discuss!

Mid Zone muddle
With around 30% of projects succeeding and 15% failing, we need to consider the 55% remaining projects in the mid zone, struggling for a foothold in the ‘shallows’ and ‘shifting sands’ between success and failure. Do these projects ‘partly succeed’ or ‘partly fail’? Are they caught up in some ‘timeless whirlpool’ that cycles them, infinitely? Clearly, not. They would run out of money, time or support for never to be achieved benefits. If we want to draw sensible conclusions from statistics, we need more accurate reporting methods, with more precise detail and granularity. Build in tighter controls. Build a better dashboard. Lead this ship of lost souls out of the doldrums.

Choose Success or Failure?
Moving on, let’s get back to the big fight; Success v Failure. The first question to be considered is; Should we be,

1. Considering the key factors leading to success or the risk of success or;
   
2. Examining the sources of and risk of failure?
   

They are linked, of course but one is intrinsically passive and reactive, whereas the other is more proactive. In Project Management and in business today, we need strong proactive project management resources that encourage, understand and support, the risk of success and can quickly recognise the need to mitigate away from failure.

In the latter stages of a project, this turnaround from imminent failure to possible success, can be achieved by bringing in an experienced rescue PM. They will quickly assess the damage, examine the mitigation potential and plot a course out of the swamp.

How? Simply through the disciplined use of proactive PM methodology and tools, plus the implementation and positive use of strong Risk management approaches. Oh Yes! and the benefit of decades of PM experience. Call me sooner than later.

Remember: Charismatic figureheads need to be ahead of the crowd! AND the crowd need to be behind them, all the way! (not as easy as it sounds)

Getting on top - Dominate your Credit Risk

Until recently, when debt became more expensive and harder to come by, companies generally had a blasé attitude toward managing their trade-credit risk. Most corporations, big and small, don't have credit risk procedures any more sophisticated than the sub prime lenders did. In which case you are flying in dangerous territory with your defenses down.

A simple tip but one that's been largely ignored until recently: Be more wary before extending credit to new customers. Make them prove their creditworthiness. Currently, companies take more a of shy unassuming approach to trade credit by quickly granting it to every new client that comes across their threshold. Once aboard they hope for the best and follow the client's payment performance over time.

Companies too often get into the habit of not asking for any financial information from their customers in favor of speeding up a much coveted deal. Suppliers have been doling out credit based on what little information may be available on their privately held clients, despite the fact that private firms have a higher rate of bad debt. Even after a credit account has been granted, the supplying company may shy away from asking for financial data because they don't want to offend a brand-new client. Clearly the banks have a part to play in all this because they too have been willing to extend credit lines far beyond reasonable doubt.

Companies should ask for customer and bank references up front. Although, that information may be biased and unreliable because of the struggling financial institutions. Will the bank and lenders be there in the long term for their customer? Are they going to provide financing or will they make a quick exit and leave the company with a liquidity shortfall, which may or may not cause the demise of the company? Are the financial institutes responsible for the ongoing viability of their clients, i.e. the corporate companies. What support and backup can they provide a struggling company when they themselves are in difficulty. These and many more, are all questions vendors need to ask themselves when looking over a customer's bank information.

Companies should request that all customers, new and old to fill out a one-page credit profile every year. The sheet should include the company's cash position and the most up-to-date contact information. A type of credit probe which may or may not provide the correct level of information in the right format, in a timely manner. This will lead to more overhead in the accountancy dept or with the business analysts, but if addressed properly, it may provide early warning of difficulties.

If there is any good news to be had during this economic downturn, it's that everyone is in the same boat. Your customers are asking their customers for more financial information. It's now become perfectly acceptable to ask about a client's financial status because everyone is being scrutinized by every supplier. Its a big global circle of accountants, checking each others assets.

If it's impractical to demand financial information up-front, then come up with a triggering number for when your company will demand it. A simple threshold or framework will suffice. If clients cross the established and agreed amount, then they must provide their trade creditors with financial statements to validate their credit. The type and level of the threshold can vary depending on client, industry, item value, uniqueness, development costs, credit exposure, etc. Its not a numerical value, its a way of thinking about and controlling your risk exposure.

Another way to improve your credit /risk management is to conduct a detailed assessment and calculate each customer's probability of default. With such precise knowledge you can price your services accordingly, and by showing your client the calculations, you can easily justify a premium rate. Cash has always been king and currently it is even more critical to companies health and financial welfare, but many companies have no idea who they're selling to, never mind who owns the company or their cash position. Its never been more critical to know your customer.

Moreover, suppliers can no longer rely on traditionally held views that big-name companies are safe from sudden and dire financial problems even if they don't have strong cash flow. Many of these companies have lived on extended credit lines for years and are not asset rich. Other companies can have negative cash flow and positive net worth. They're sitting on land or occupy buildings that no one's willing to buy. If their credit is pulled and they end up going bankrupt, the asset value won't cover the debts.

Experts also suggest sales and credit departments improve their communications between salespeople and the collections side. Your salespeople are trying to maintain the vendor /customer relationship at the same time as maximising their commission payments. This is a tightrope, and is a very dangerous situation for the company to ignore. It must be very, very tightly controlled. Don't allow salespeople to grant extended payment terms, without justification and authorisation, before checking in with their credit counterparts. Companies should use these negotiations to get more financial information out of their privately held clients and reprice future services if possible.

Moreover, salespeople may be able to offer the credit department more insight into a customer's financial situation. Therefore it is imperative that they have the influence, motivation and the time to actually get involved in credit and collections questions. Its a team effort and everyone better be on the team or the game is over.

Slash your credit exposure

The current credit slump and downturn gives companies an excellent excuse for demanding that customers share more financial information with them. This is not for the direct benefit of the customer but to keep on top of the clients' ability to pay and stay viable. You don't want the stream to dry up.

The distinction between dependable and unreliable customers has never been distinct and now it is even less so.

Corporate clients that are paying you on time may in fact be financially unstable and maintaining a good public image, could be delaying payments to other trade creditors. Should you be concerned?

At the same time, some customers may be withholding their payments, not because they're in dire straits, but because their banks is shortening their normal credit lines. More worrying is, if they are not willing to lend to them at all, in the near future.

Indeed, some companies want their suppliers to practically fill in as bankers, by extending payment terms and giving their working capital some room. Ifcustomers are asking their vendors to provide cash flow for them, then this is a very uneasy situation. If you have somebody who was once paying you every 30 days and is now paying you every 60 days, your own credit exposure is going to double. You have to evaluate if you want to take that kind of risk, at this time, with this customer.

It's never been an easy task especially now. Companies need to get a better handle on their corporate customers' ability to pay. Nearly one-quarter of publicly traded businesses worldwide are at risk of defaulting on their debt, according to some recent indexes of "troubled" public companies, whose default probability exceeds 1 percent. During the past 17 months, their risk-management firm's monthly barometer of 21,000 public companies in 30 countries has been creeping closer to the September 2001 all-time high of 28 percent.

What's less-known is how many private companies are at risk of defaulting on their promises to creditors. They tend to keep their vendors in the dark about even basic financial information. Their suppliers are sometimes stuck, relying on only basic bank information.

Of course, the rising number of hurting companies isn't news to accounts-receivables departments that have been well aware of their corporate clients' slipping ability to pay for several months. But there have been some surprises: Now, even customers once considered to be "excellent payers" are taking an extra month or more to pay their bills but then maybe their just taking advantage of your loose credit checks, risk profiling and accounting practices.

In fact, the trade group's latest monthly barometer of its members hit a record low of 40.1 in December. The survey asks 800 credit managers to rate favourable and unfavourable factors in their business cycle (unfavourable factors include rejections of credit applications, monetary unit {cash in} collections, and amount of credit extended). All those factors declined between December 2007 and December 2008.

The overall problem is, suppliers, especially small businesses need to tread carefully before pressing clients to pay up. Every company wants to keep their most valuable customers and not lose them to disagreements or hurt feelings over payment terms. The vendor-customer relationship is symbiotic, very personal and emotional.

However, no company wants to get burned by being too nice and seeing old invoices pile up or payments seized after a customer goes belly up. Trade-credit experts say that by the time you notice a customer is on the brink of insolvency, it's unlikely you'll get all the money that's due to you. So do your homework. Analyse your clients' risk profiles and get on top of your riskiest customers. Then you may have a chance to see the impending crash and minimize the damage to your receivables.

In particular, trade creditors want to avoid having to return payments received within the 90 days before a customer files for bankruptcy. Bankrupt companies can sue for those payments up to two years after they've entered bankruptcy court. So, if a company suspects a client is close to going under, the company can demand cash on delivery, payment in advance of a shipment, or a letter of credit. All of which are methods of payment that are not subject to preference claims.

Another way to avoid unexpected losses: Ask bankrupt customers to add your company to their critical vendor list. Depending on the bankruptcy judge's ruling, this group of vendors may be paid immediately over other suppliers if the debtor can show that the vendors' products or services are crucial to the company's survival and turnaround efforts. At this point the ship is on the rocks and you may just be looking around for flotsam to cling.

Lay-offs and litigation - lawyers win both ways

With potentially costly legal claims by dismissed employees soaring, employers need to make sure their job reduction and elimination plans are substantiated.

Nothing in life is free. While companies are jumping to reduce head count because they see an opportunity to save money in the short term and a way of openly validating those savings i.e. the economy is sinking. Be aware, they should be prepared for the possibility of punitive legal actions against them by aggrieved workers, and they need to consider how they can underwrite the accompanying legal costs.

The number of litigation actions is rising in tandem with the pace of job reduction and eliminations. These cases are boom-time for the defense and employment lawyers. They're seeing a major spike in their business that will not abate anytime soon. Its an ill wind, that usually helps some lawyer or other.

The main categories of lawsuits are those in which employees claim their dismissal was discriminatory, usually based on age and those, which requires advance notice for mass layoffs and plant closings.

Attorneys advise that cautious planning when making layoffs will help avoid a trip to court. They suggest that when you do decide to commit your company to a layoff of any size, then take good advice and plenty of time to make sure it's done right.

The Finance Dept. and accountants may not be directly involved in executing layoff plans, but with the risk of a sizable legal judgment, it gives them plenty of reason to stay involved. If only to satisfy themselves that the plan is legally and therefore, financially sound.

The first step in any staff reduction exercise, should be creating a detailed business plan that explains the need. Included in this will be;

• what facilities or businesses will be affected,
• the number of positions affected,
• what type of positions will be lost (What effect will this have on the future business)
  
• when the layoffs will occur, and
  
• how they will be announced,
  

All this must be clearly defined and approved before any actions are taken. There have certainly been some times when the legal or finance dept. have had to tell management to either come up with a more defensible reason for the layoff or rethink the decision. Analyse and assess the risk.

Juries will side with the employees when the employer doesn't have adequate documentation. Internally everyone is in such an emotional and stress driven crisis mode when they're involved in workforce reductions. Therefore, things that they may think are obvious to the world, are not. It pays to get an objective, knowledgeable view on these things.

The potential for discrimination lawsuits makes it essential that employers create an objective selection process for deciding which employees to let go. If 25 workers are dismissed and 20 of them, say, are over age 50, the chances of a lawsuit will rise dramatically. Its not to say don't do it its just to say, be prepared to defend your decision in court.

Is you wish to be seen to be logical and fair about the selection process, then some lawyers suggest that executives create a list or matrix of criteria for evaluating employees. This can include;

• years of service,
• qualifications,
  
• experience in the field,
  
• job performance,
• team working ability,
  
• disciplinary history.
  

A weighting should be assigned to each criterion, and each employee should receive a numerical rating in each category. Clearly if only one person is allowed to do this, then it will only be one persons opinion and that is difficult to defend.

To avoid subjective bias and statistical anomalies, companies should consider hiring a statistician to objectively evaluate the layoff selection criteria and ensure that none of them is in itself discriminatory.

It may prove difficult to avoid exceptions to the process. For example, a job-performance measure may take into account employees' past three annual reviews, but some people will have been hired more recently. Diligently document and explain in detail any reason for deviation or breaking from the official process.

But even a thoroughly objective selection process, while defensible in court, is no guarantee a lawsuit won't be filed. As a further safeguard, companies should conduct an impact analysis of how layoff decisions will affect the makeup of each protected class of employees. If a protected group is disproportionately affected, the plan will look discriminating and the company may want to alter it accordingly.

A company's legal concerns don't end with the selection process. Executives who deliver the bad news must tread carefully with their word choices so as not to come across as apologetic or sugar-coat the real reason the employee is being dismissed.

By saying, 'This isn't your fault, this is our fault,' you will be falling on your own sword." The employee can easily use such a loose statement against the company in court.

Watch out for a rise in the number of whistleblower cases coming from former employees. As more and more people get terminated, there's going to be more and more litigation and cries of protest.

Red Flags - Customer's falling credit status

When it comes to credit risk profiles, watch closely for these red flags in the companies you depend most on for financial stability, your customer.

The stringent credit markets make spotting a soon-to-be insolvent company increasingly difficult. It's difficult to determine who's really on the edge and ready to go out of business, versus who is having tough times and struggling, but will survive.

To avoid losing future payments, companies should be on the constant lookout for red flags. Signs that a customer is having serious financial problems. The following don't necessarily indicate that a client is on its knees or in contingency mode. But depending on how any of them are relevant, should trigger a warning bell for your credit department. Worst case, the customer deserves close monitoring, and perhaps their payment terms renegotiated.

Changing Payment Patterns.
Perhaps the most obvious clue that something could be financially amiss, but one that cannot be ignored, particularly these days. Previously reliable customers that suddenly start missing due dates warrant attention: If your customer is falling further and further behind in making payments on their invoices, that certainly should be a tip off that something may not be right.

Renegotiation requests
If a company asks to spread payment windows from 30 days to 45 or 60 days, this should raise eyebrows. Hone your credit skepticism on requests to reschedule payment agreements, such as paying off one service over four months rather than all at once, as previously agreed upon.

Shifting Buying Habits.
Even if regular customers are paying on time, are they still purchasing? Examine and analyse the trends. If their previous buying was consistent, but their manner of placing orders has changed, this could suggest trouble. Also, keep a lookout for regular customers that suddenly start buying more. Pre-bankrupt companies have been known to stock up on inventory, knowing they won't be liable for the goods later on. This is a very unpleasant maneuver and should be stopped. Fix your customers' credit /risk profiles and keep them within their credit thresholds.

Rejection levels, Haggling or Higher Demands.
Is your customer returning items more often, or unjustifiably asking you to make deductions off invoices because of damages? Customers that start making unreasonable demands on delivery are sending you a warning. Your customer, may start saying his company expects a discount if a shipment doesn't arrive within very tight deadlines, especially if he knows that you can barely meet. Be warned and look behind the request.

Shrinking Cash Flow.
Keeping a close watch on your customers' cash balances over time, is what the good companies do all the time, if you have access to their financial statements. Find out how much they rely on equity, short-term debt, or long-term debt and adjust their credit /risk profile accordingly.

Large Accruals.
Many distressed companies carry sizable accruals on their balance sheets, so these figures need to be explored and justified. First you need to get access to their balance sheets, that in itself may cause difficulty and could also give an indication of solvency.

Tight Lips.
Customers that previously shared financials with your company, but now suddenly claim it's against their policy to share financial data. This should only make you more determined to find the true picture but if in doubt, err on the side of extreme caution. Shorten their credit lines until they come up with strong evidence to convince you.

High DSO (Days Sales Outstanding).
Companies that have fallen behind on collecting their own receivables may be unable to contribute to yours.

Managerial Shuffling.
Unexplained or questionable changes in management could mean that there's a disagreement between executives and the company's board or owner. More obvious signs of trouble in this regard would be the hiring of a chief restructuring officer or turnaround company. Its a warning flag, but at least they are addressing their issues. Tighten credit lines in the short term, til the re-structure is effective and things improve greatly.

Persistent Rumors.
Credit experts recommend keeping your ears open for any negative news about your customers, which may be the only way to garner helpful financial information about privately held clients. Pay attention to news articles, whispers from your sales teams, and other companies' credit managers. There are industry-specific credit groups that are invaluable for uncovering past-payment records of customers, search for them and make friends with them.

Tax Liens.
A tax lien against a company is the number-one indicator that it's going under. If a customer has postponed paying its taxes, you're not likely to see its overdue payments either. Sound the alarm!

Credit Crunch affects auto trade - 2 for 1 sales

The credit crunch brings with it many painful realisations, not least of these is the confirmation that we, the many, have been paying too much, for too little, for too long. This is clear in the current tactics being employed by some auto traders, desperate to retain their franchises and car sales businesses. Many are offering a 2 for 1 sale i.e. buy 1 new large family saloon car and you get a new small economy car, of the same mark, seemingly free. What a great deal, at first glance.

Shall we consider the maths? First you have to understand what drives the auto traders' business priorities, apart from making big profits. The way that auto and other franchise licenses work is that you, the license holder, need to guarantee the franchise owner a large turnover of product and a certain level of other ancillary business items, through your outlet. For auto traders, this is primarily the number of new cars, spares and possibly second hand cars, if they are running a registered and affiliated scheme that is associated with that automobile mark.

The normal mark-up on a new car is around 40%. I know this because I had the opportunity to assist a franchise holder clear his new car stock backlog, by buying some at cost. There is an advantage to do this if you sell on to the private buyer but there is no advantage in doing this if you expect to make money from another auto trader because they have access to an online register that shows the history of the car from manufacture. If you try to trade it in as a nearly new car you will be viewed with great suspicion. They may believe that you are testing their loyalty to the mark franchise by offering them something that has circumnavigated their rules.

Chances are they will either outright refuse to deal with you or tell you a price that is well below what you paid i.e. something around 50% of the normal on-the-road car price.

So let's get back to the arithmetic. Your new family sized Mazda costs you 25,000 monetary units. The dealer paid roughly 60%, 15,000. The immediate profit to the dealer is 10,000 units. He now offers you a free mini Mazda, which normally costs 7,800. You think you are quids in but the mini Mazda only cost the dealer 4,680. So he still has an excess profit of 5,320 on the deal. Plus he keeps his franchise margins, he gets a loyal and happy customer, he gets the spares and service revenue from a loyal and happy customer. In addition there may also be a small commission (between 5 7.5%) from the finance company who provides the customer with a smart personal loan to bridge any shortfall in monetary terms. So everyone is happy and life is good all round.

As a disclaimer, I would like to say that I have conveniently simplified the maths of percentages here and forgotten to mention the further complexity of reducing VAT, car Tax contributions and other legal and admin overheads etc. to simply the argument. Although this post is based on real events, no car dealers were injured in writing it.

For the future, try not to dwell on how much money the dealers has already made from you in the past. Let it go. The hardest pill to swallow is where your current vehicle's residual finance value is far greater than that of the vehicle's current market value i.e. you will need to spend more money to terminate the finance agreement than the car is worth. Ouch!

On the personal front, clear yourself of as much debt as you can and look to the retail markets for more quick win bargains to come. The wholesale manufacturers, retailers and dealers will become more and more desperate to shift stock because 'stock is money out' (bought on credit) and a quick return through a stock clearance event is the best way to greatly reduce the cost of that credit. Most organisations will be under pressure from their bankers and financiers to reduce their credit profile and overdrafts. Credit facilities are being rapidly withdraw. This will lead to a saturation of the retail market with the loss of many of the current familiar players.

In the parlance of the entrepreneurial estate agents, you will be looking for motivated sellers.

Drive safely, your life may depend upon it.

The People Power Triangle

I have composed a simple diagram that illustrates the 3 most important things you need in life or business, to truly succeed. At the risk of patronising you, let me point out the message.

To gain Authority, People need Knowledge and Experience.
To gain Knowledge, we need Money to pay for our studies.
To gain Experience, we need to spend Time applying our Knowledge.

Project failure starts at the begining

We are all familiar with countries, towns and destinations that are difficult to reach, either by road, rail or public transport and yet people exist there and thrive. It is not in another dimension or another planet, where predictable 'difficulties' are numerous e.g. expensive ad hoc rocket ship service, an atmosphere of sulphuric acid, temperature variations in the region of 'scorchingly off-the-scale', etc. No, our difficulties in reaching our earthly destinations are because we do not start from the correct location.

This is a lesson I learned when lost in Dublin and forced to ask for directions. It was made clear to me that to get to point B I should have started at point A and not the point that I was currently at, which was currently unknown and would henceforth be referred to as X. Thus, making the logic more mathematically predictive.

The start point and the end point, part of the defining structure of a project and thus lifting it away from the realms of a simple action or activity, are critical in the initiation and definition of the project and the associated project plan. You will never reach the end destination if the start is left to serendipitous happenstances.

• Plan the beginning of your project meticulously
• Involve as many of the stakeholders as possible
• Hold a workshop with all the allocated resources
• Seek out Subject Matter Experts (SMEs)
• Do your research, technical, business, historical, etc
  
• Assess the Risks (qualitative and quantitative) and
  
• Look where you are going

The dark matter of Projects failing

IT projects suffer from a similar force to that of the astronomically evasive 'dark matter'. A force that is not so much negative in its manifestation as it is in its effect, especially on other matter. It has an ability to occupy space without contributing anything, interacting with 'light matter' only to drain its energy and restrict its ability to move freely.

'Dark matter', and its ability to absorb and retain energy without contribution, is a universal anomaly for physicists. A puzzle yet to be solved. A question unanswered but not for project managers and team leaders. We know this effect and understand the consequences very well. It is a similar force to the one that will cause your project to fail. It is your greatest adversary. Its invisible. It can be detected but not controlled, without the right tools and level of experience.

Corporate Defense Domain

The Corporate Defense Domain is a convenient way of describing the sum total of numerous secure approaches, tools, processes, etc. that incorporates the entire environment security of an organisation, from end to end or perimeter to perimeter.

The concept of Corporate Defensive Domain is an aid to perception evolving from a vision of Physical Risk through IT Risk, Operational Risk to Governance, Compliance, Legal and Reputation Risks.

Corporate defense
Corporate security is purely defensive. There is no moral imperative that allows positive attacking action against threats and those that attempt to, or unequivocally, inflict damage on your organisation. Some but not all, of these attacks can be very determined and sophisticated because they are goverment funded and are either commercially or politically motivated. Most are just motivated individuals that can be classed as intellectual vandals.

As with all the good guys, you must work within the framework of the law and this only allows vigilance, defensive action, and possibly post-event retribution and compensation. The subsequent capture and imprisonment of a perpetrator may become a public spectacle. An apparent show of the success of your strategy and hopefully it will act as an example to others but in reality it is of limited effect and brings little solace to the organisation.

Showing your hand
There is also a view that public trials act as a learning curve for other attackers. The attacker creates an action on your perimeter and you display a measured reaction. Thus revealing some of your defensive strategy, processes and tools.

Security realms
There are many realms that exist in the land of security e.g. physical, electronic, virtual, etc. and there are many ways to look at and examine security. It can be viewed as a) a physical obstacle b) a process inflicted on reluctant personnel without explanation or c) an acceptable mindset that is instilled in the environment with the full involvement of the personnel. This latter approach should produce the best results, giving staff a sense of involvement, empathy and a real feeling for the potential consequences.

Secure personnel
It is critically important that your staff buy into securing the corporate domain because they are typically, the weakest link in the security of organisations.

Staff issues

• They are not so easily or reliably programmed,
  
• They don't always retain or apply knowledge appropriately,
• They are swayed and diverted by social engineering techniques,
• They have good and bad days,
  
• Their attention is inconsistent, etc.
• Their human!
  

Threats & Vulnerabilities
There are many ways to examine Threats and Vulnerabilities in an organisation e.g. by geographical location, business type, resources used, historical or political instability, etc. Do you know and understand what criteria and imperatives are being used to drive changes in your defenses? Are they appropriate, operationally maintainable or cost effective.

Analyse the Risk
Organisations are are driven to respond to threats and are compelled to adopt more and more complex defense strategies to address and defend their security needs. Security policies and strategies dictate that a full gambit of approaches should be adopted, from standard process implementation to strict and intricate application frameworks but this has an operational and business cost implication.

The questions that are not always being asked are;

• What is the real cost of defending your business?
  
• How much are you likely to lose?
  
• Where will the danger come from and in what form?
  
• How will it impact us?
  
• What is our response capability?
  
• What is the overall Risk profile?

Feal the fear and hold your ground
With the constant threat of intrusion and compromise, regular and detailed testing and re-examination of all your defenses are necessary but before you can realistically and effectively apply what you have learned, you need to conduct a detailed analysis and assessment of the Risks, the potential business impact and your response options .

7 Points to build stronger, more secure Corporate Defenses

• Create executive level authority and responsibility for Corporate Defense, policy and implementation
  
• Assess your strengths and weaknesses using mature Risk management methodology
• Examine the interdependencies between your tools, processes and defensive positions. Strengthen the perimeters and communications
  
• Map and review your Corporate Defense Domain strategy, continuously, in a structured and determined manner.
  
• Determine, test and examine areas of Convergence, for overlap and gaps. Establish strong boundary defenses and stringent hand-over criteria
  
• Develop a single hardened core entity, an authoritative cross functional discipline, incorporating Governance, Compliance and Risk
• Lock the perimeter gatesways, give the spare keys to your organisation to the central hardened core and prepare yourself for the next attack

Navigating in the Credit Crisis - Top 6 Lessons Learned

Recent Ernst & Young Financial Institutions report on the credit crisis reveals that the top 6 lessons learned are as follows;

1. Liquidity (cash) is King - 90% agreement in financial institutions (100% agreement in the real world)
   
2. Risk needs to be examined across the organisation - 73% (Co-operation means no more secrets, fewer surprises and the avoidance of expense rescue efforts)
3. Stay tuned to industry trends, dynamics and cycles - 60% (Look outside & Listen! Use the radar, dashboards and the crow's nest if you have to. There are icebergs about and they will do more than freeze your assets)
4. The people factor - 40% (You have professional, intelligent staff on board, so use them appropriately. You pay them for their knowledge! They know stuff! Talk to them!)
5. Prepare for the unexpected - 35% (Analyse, Assess and Mitigate against risk. Think the unthinkable. Develop Backup, Contingency and Business Continuity plans. Jumping onto the iceberg at the last moment is not a good option)
6. Don't believe 3rd Party rating agencies or your own marketing hype - 23% (Simplify! The devil is in the complexity. Find the true facts and stick to them. Do your research and check in to reality occasionally, between those long business lunches)

Day 1, Lessons 1 - 6 in the Business school 101 course.

HR - New Start Integration

DIS - Dynamic integration support in a rapidly changing, cost conscious and fast growing enterprise

The dynamic integration support process will supplement and enhance the services provided by the organisations stressed-out HR staff and management team. The consultant addresses the volatile requirements of stakeholders both in the rapid uptake of candidates and in their effective integration into the new environment. The consultant decreases the time taken to assimilate new staff and embed them into the team and organisation, maximising their effectiveness and motivation throughout.

Chief Executives

Dynamic integration in a rapidly changing 'cost conscious' enterprise is able to support and supplement the HR staff in addressing the 'cost versus talent' argument by supplying focused coaching skills to candidates that may be less qualified, less experienced or unused to the new environment that they find themselves in. Free from this responsibility, the HR team can then concentrate on sourcing candidates with the greatest potential and the right motivation to grow without worrying about precision skills matching and the integration of candidates that may have different or unmatched energy levels and personalities from the incumbent team.

Hierarchy awareness and Buy-in

The DIS process also requires that the managing environment and team understand the changing team dynamics and that they are also positively managed through this period. Working on behalf of the organisation and the team, the DIS process ensures the rapid uptake of new skills and knowledge by the candidate. Supplying the provision of a mentor to manage the changes and to mitigate or resolve any risks or issues, envisaged or arising. The consultant will establish a buffer or de-militarised zone to allow the free flow of dialogue and negotiation, minimising disruption to the team’s effectiveness and to managerial goals.

Performance enhancements realised

It is vital to be able to positively manage the organisational expectations coming from forthcoming changes in staffing levels and the introduction of new skills and personalities. The organisation must maintain team and goal cohesiveness and remain focused on moving forward, not at the same pace but with greater efficiency, greater capability and rapid growth. To do this you need to increase effective integration rates and decrease staff fall-out and turnover. The loss of experience from an organisation is taking the life blood out of it, in the form of loyalty, commitment and hard-won knowledge. Thus compelling them to make the same mistakes over and over again and sustain losses repeatedly.

Finance Officers placated

By supporting the management from within, the stakeholders’ expected benefits, established goals and ROI can be truly realised and even exceeded with the correct level of coaching and mentoring, targeted at the right people, time and place.

Operational success

Left to their own devices a new candidate and the installed team will take up to 3 months to fully integrate and become truly effective to the organisation. The first 6 weeks will find the candidate isolated and floundering to find knowledge and develop new skills on his own initiative whilst the installed team circle around them, sizing and testing this new guy. No organisation can afford to wait that long for a return, especially if it is ‘disappointing’. If you are left wondering why the increase in numbers does not relate to a direct increase in revenue, we have the answers for you. We will be happy to support you. Contact me on kenwbudd@lycos.co.uk

Team integration issues - example

As a new start, it is at this time the candidate will bond with, or be be-friended by, one or some of the team but not all. This may not be with the positive thinking, forward thinking group that you would want them to join. In fact it is more likely to be with other members of the team that have become isolated and withdrawn.

If this trend continues then the team dynamics will start to move in the wrong direction, because every new candidate will be drawn to, recruited by or be-friended by, the ‘outsiders’. The team will start to experience a new division instead of an integration. A divided team is very un-focused, difficult to re-unite and the devil to manage effectively.

Cause and effect

Circumstances like this lead to overloading or repeated distraction of the next level of management, keeping them away from their core activities. Instead they find themselves increasingly involved in ‘territorial’ disputes and trivial ‘personality’ clashes. The intended growth of the organisation is diverted or worse, stalled and, because of the push on recruiting and taking on of new staff, suddenly you now have greater overheads.Unless rectified the company is heading for a self-destructive downward spiral.

Your operational managers are faced with issues that began a long time back and have now become established and possibly cultural. In the words of the Irish philosophers ‘If you were trying to get to Dublin city quickly, I would not have started from here!’