An unreasonable budget: an explanation or a justification?

?? How do you deal with unreasonable budgets and deadlines?

This is the question I received today from the Today Action Test Page 4 and I accepted gladly the invitation to write my perspective.

PMI ethical values are honesty, responsibility, respect and fairness. In my response, I will use these values as a beacon of light or a reference, to show how you can do it, too, when assessing situations or contemplating decisions in your project.

Let’s say you are neither a PMI member nor a certified PMP. So you are not held to these values. Nevertheless, I cannot think of a modern project management based company in a democratic country to not declare these four elements to be part of their values (curious if you actually know of any saying otherwise).

With these values in mind, what does an unreasonable budget or deadline mean and how comes one may occur?

My thesis is the following:

If the project manager would have conducted a responsible job of estimating the resources or duration involved, would have not withhold (with intention or not) critical project information to major project stakeholders, would have pursued an honest communication and would have paid attention to treat with respect and in fairness people, that project manager would have not had to face an unreasonable estimate.?

And I explain below why.

In coaching project managers I often hear justifications such as:

• Yes, but the client insisted on [whatever] and I had to deliver that.

As if it were the Client’s responsibilities to manage the project scope, schedule, stakeholders expectations (inhouse and external), resources or the agreements in place. In my experience, a Client will always ask. This is normal. They pay for.?

It is on the Project Manager to say IT IS POSSIBLE and let both their manager and the client know in what CONDITIONS, and how these conditions impact the project execution and all agreements in place.?

Not opening such discussions on changes and entertaining an accept-everything attitude towards the client mean the project manager acts outside his/her responsibility (the scope signed), and withhold important information necessary to the ultimate decision makers in the company. In the end, nobody will be happy, a situation which will be also unfair for the entire project team involved, which members probably did their best to save the project results.?

Ultimately, this case is an expression of lack of respect towards the project management profession, since the project manager does not do the responsibility for which he/she was assigned.

• Yes, but senior management cut our budget by %.

Well, let me not agree with you here. What information did senior management have when they cut the budget? How come this information was not clear enough to explain what is that budget for, what is included and what is excluded, what kind of risks have been taken into account, and how did you calculate the resources for risk mitigation factored in?

And even so, let’s say the senior management needed to cut (there may be perfectly reasonable explanations for such situations). What prevented you from going back to your team and having the scope and estimates redone,to inform back senior management what can be realistically obtained within the cut of the budget they provided?

Again, this case is rather about not exercising the PM responsibility in full and withholding (with or without intention) critical information for the ultimate decision makers.

• Yes, but my people do not have the capability.

Again, let me take with a grain of salt this statement. What do you mean by that? Does it mean that all your project people underperform, and that is why your budget is unreasonable?

Even if in your organisation you - the project manager - may not have the authority to veto a resource from your team, you do have the responsibility to forecast the impact of using resources at a competence level under the one for which the initial estimate has been calculated, and to present your management what will happen in case other resources are not made available to your project.?

And there are and will always be cases, when senior management will go ahead with the reality of not having other resources, but will know upfront what is the forecasted loss, to either agree and account this picture in the company’s financial forecasted financial results, or to act differently and give you other or additional resources.

This last case has even a systemic risk: not informing the senior management, creates an environment where professional growth will be punished instead of being encouraged (since the individual failure is already set from the moment of setting and legitimating the unreasonable budgets). This is in no way fair towards the project people who are already stretched at max by the pressure of their objectives. And it is neither fair for the senior management, kept in the dark by the same project manager, through the absence of honest forecast information.

To conclude, the project manager who uses the term “unreasonable budget” will just accuse himself or herself of a job not done well.

Beyond having a thorough understanding of PM concepts, all these cases have in common the need for the project manager of having also a very good discernment of how they need to use and play the authority they were invested with, so that to accomplish their very important mission: to be the ones bringing the bad news first to the company’s senior managers and allowing thus a timely and accurate process of decision making.

This implies that whenever something will deviate from the mandate received by the project manager, they (with the support of the project management team) will have to be the first catching the trend, understanding the causes, calculating forecasts, thinking of potential solutions to decrease the variance, and proposing those solution to the senior management for final approval.

Yes, project managers are those hired to bring first the project's bad news to the senior management, acompanied by adequate solutions to mitigate these news.

It takes assertiveness, it takes perseverance, it takes patience. It takes tact, it takes courage, it takes humbleness. It takes lots of self-awareness. No PMBOK will teach you that. These are traits only you can grow in yourself. Sometimes setting it as your intention is enough. Otherwise, working with a coach will be way more effective than just trying again and again and get discouraged by your own way of thinking.?

From this perspective, what is an unreasonable budget? An explanation or a justification?

What do you think? I would be delighted to hear your perspective at [email protected]

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