Bitten by a Rattlesnake

The Rattlesnake program was the second product development program Ken Jensen managed since coming to his current company, a leader in the computer industry. When he decided to change companies three years ago, he felt that the ten years he spent managing programs in the aerospace industry gave him a good understanding of program management and how to manage programs to success.

The first program he managed at his new company was a success, but proved to be much more of a challenge than Jansen had anticipated. Part of the challenge was Jensen's learning curve of the differences between product development in the computer industry versus the aerospace industry. The most notable differences were the faster pace of work and decision making in his current company and people's willingness to take considerable risk to achieve competitive advantage.

Fortunately for Jensen, he was given an excellent program team for his first program that had a strong drive for success. Jensen was elated when the majority of the team was assigned to his second program, code named “Rattlesnake.”

The Rattlesnake program was projected to take 15 months with a development investment of $10 million. The program team would ramp from 5 people in the definition stage to over 50 during full development, test, and launch. The Rattlesnake product, a multi-microprocessor data center server, was considered to be highly competitive, with 10 technology advancements that were new to the industry and certain to provide product differentiation and therefore, advantage in the market.

Jensen had high regard for the senior sponsor for the program, Vivek Rondi, the business unit general manager. Rondi was an exceptional visionary, was adept at taking the appropriate amount of risk to achieve the company's goals, was a strong and effective decision maker, and fully empowered his program managers to lead their program teams. All of this positioned Jensen to succeed with Rattlesnake.

Defining Program Success

Through the earliest stages of the program, Jensen led the definition and planning team through a series of activities aimed at establishing a trajectory for program and business success.

First, Jensen and the Rattlesnake team established a program strike zone, which documented the business success criteria and associated measures and metrics for each criterion. A portion of the Rattlesnake strike zone is shown in Figure C.1.

Multiple conversations with Rondi were required to agree on the right measures for each of the business success factors, as well at the target and threshold values. According to Jensen, “Establishing the strike zone is probably one of the hardest parts of managing the earliest part of a program, but probably one of the most important. It definitely tested my negotiation skills!”

From his aerospace experiences, Jensen knew that establishing a strike zone for a program was necessary, but also understanding the level of risk associated with a program is crucial for several reasons. First, it is a focusing mechanism and provides guidance as to where critical program resources are needed. Second, it is used to determine the amount of schedule and budget buffers to include in the program plan. Finally, good risk management practices enable informed risk-based decision-making.

A three-tier risk assessment scale (high, medium, low) was used on the Rattlesnake program, with both probability of occurrence and severity of impact vectors evaluated. A forth category, showstopper, was used to identify risk events that would have a catastrophic impact to the program if they occurred, and if no risk avoidance plans were in place.

During program definition, nearly two dozen risk events were identified prior to the business case approval meeting. However, common practice within Jensen's company was to present the “Top 10” risks as part of a program business case. For the Rattlesnake program, seven risks were identified as HIGH and three were identified as MEDIUM risk.

During the course of the planning stage, a total of seventy-three risk events were identified by the Rattlesnake core team. To Jensen, this was a large number of risk events to comprehend and manage as compared to the programs he previously managed in the aerospace industry. As Jensen described it, “I was completely overwhelmed by the number of risks we were dealing with.”

Following the same practice of presenting the Top 10 risk items for the program at major decision checkpoint meetings, Jensen set about analyzing and prioritizing each of the seventy-three risk items with the help of his team. During this process, many unknowns were flushed out and driven into the program plan, while the remaining unknowns were characterized and response plans were developed as appropriate. This time, the “Top 10” risks that were presented as part of the integrated program plan included two showstopper risks, six HIGH risks, and two MEDIUM risks.

Despite the existence of two showstopper risks, Rondi and the product planning committee granted approval for the Rattlesnake program to go into full development. “The approval decision really surprised me,” stated Jensen. “I would never have gained approval with two potential showstoppers when managing programs in the aerospace industry,” which highlighted a difference in industry risk tolerance.

Hearing the Rattler's Warning

Several months into development, Diana Best, a Rattlesnake project manager, came into Jensen's office with a concerned look on her face. “I think we may have a problem with Tojamma Corp, the data controller device vendor,” she said.

Caught a bit off guard by the comment, Jensen responded cautiously. “How so?”

Best explained that the vendor was indicating that there were some problems with the final prototype part, and that they were starting to talk about having to do a partial redesign. Jensen's caution changed to concern.

“When will we know for sure if they have to do the redesign?”

“Probably within two or three weeks,” responded Best.

Trying to get a handle on the severity of the problem, Jensen continued his questioning. “And do you have any idea of the potential schedule impact?”

Best knew this question was coming, and she wished she had a firm answer for her program manager. “Unknown right now,” she responded. “It depends on the extent of the redesign. I'll work to get that information, but I wanted to give you a heads-up.”

“The next Rattlesnake program review with senior management is next week. Since this is one of our showstopper risks, we're going to have to be able to discuss it in detail at the review.”

“Understood,” replied Best. “I'll get as much information as possible for the review.”

The Rattlesnake program was now five and a half months into the development stage and more than halfway through the program cycle overall. Jensen briefed Rondi on the changing status of the data controller vendor shortly after his conversation with Best. Rondi and Jensen recognized that the trigger event for the risk item had occurred: vendor indicates a redesign may be needed. Rondi asked Jensen to pull the engineering architect and marketing representatives together to evaluate options for the Rattlesnake product in case the data controller device is not available when needed.

As anticipated, the next Rattlesnake program review was a lively discussion centered on the highest risk item for the team: data controller device vendor nonperformance. Best learned that if a partial redesign of the data controller device is needed, a two to three month delay in part availability would ensue.

Rondi knew that a three-month delay in the data controller schedule will push this product outside the market window and that their competitors were not that far behind them in their own development.

Looking at Jensen, who was now at the front of the conference room, Rondi began his questioning. “What did the team come up with for redesign options, Ken?”

Having spent the morning preparing for this question, Jensen was quick to respond. “Any redesign of the existing Rattlesnake product will require two prototype builds and test cycles. This won't buy us any time.” With no comments from the room, he took a quick breath and continued. “It looks like our best option is to move some of the key features of the Rattlesnake product into the existing Santiam product, which we released last year and is still doing well in the market. The team thinks this can be accomplished in one design and test cycle.”

“Patricia, what's the impact to the gross margin and return on investment estimates?” asked Rondi, as he turned his attention to the program financial analyst.

“The gross margin will go down about 3 to 5 percent because we won't have the full Rattlesnake feature set to justify the premium selling price. However, we have been able to negotiate favorable prices with our current suppliers if we extend the life of their contracts by utilizing the Santiam product.”

Chiming in next was the product manager, Raj Jains. “Our lead customers aren't happy, of course, but they haven't indicated they will lower or cancel their preorders if we deliver a redesigned Santiam product.”

Rondi was impressed with the level of research the team did in formulating their recommendation. After briefly contemplating the recommendation of the team, Rondi provided the guidance on the next steps the team should follow. “Okay, we need to delay the start of the next program in the pipeline, and put the design resources on the redesign of the Santiam product.”

“Does this mean we kill the Rattlesnake program?” queried Jensen.

“No, I want parallel efforts to continue, at least until its clear which direction we need to go,” replied Rondi. “Ken, I want your vendor project manager to act like human glue to the data controller vendor. I don't want any delays in making our decision.”

“Understood,” said Jensen as he thought about how effective Rondi was in making the tough decisions. He still remembered how long it took to arrive at similar decisions at his previous employer.

Over the next month, work progressed on both the Rattlesnake program and the redesign of the Santiam product. Jensen and Best were in contact with each other on almost a daily basis. Best was now working in the vendor's facility in order to stay close to the internal communication. This turned out to be a wise decision.

While grabbing a cup of coffee at the vendor's office one day, Best noticed Tom Shaw sitting alone in the cafeteria. Shaw was the engineering manager for the data controller device. She decided to take the opportunity to have a quick chat about the controller.

“Hey, Tom,” began Best. “How are you?”

Shaw was a little startled by Best's question, as he was deep in thought. “It's probably not a good day to answer that question.”

Sensing something was bothering Shaw, she pried a little harder. “Why, what's up?”

Hesitating, Shaw decided he would tell Best the current status of the data controller. He knew she'd find out about it soon enough anyway. “I'm going to recommend a major redesign of the data controller to my management team this afternoon.”

“How extensive is the redesign?” Best was trying hard to hide her anxiety.

“Nearly 30 percent of the device has to be redesigned.”

“Damn,” responded Best. “Yeah, I know. Please don't communicate this to your team yet. It needs to go to my senior management team first.”

“All right,” agreed Best. “But by the end of the day I need to be able to communicate this to my program manager.”

“That's fair. I'll contact you after my meeting with the management team, if there's enough of me left, that is.”

“Good luck,” said Best, trying to provide some support to Shaw who was obviously dreading the events of the day ahead of him.

The Rattler Strikes

The phone rang in Jensen's office at 4:30 pm. He was hoping the call was from Best because he had received some encouraging news about the redesign of the Santiam product that he wanted to share with her. “Hello, this is Ken.”

“Ken, this is Diana, I have some bad news for you concerning the data controller device.”

Jensen's mood changed immediately with this comment. “I have some news for you too, but it sounds like you need to go first.”

Pausing briefly to collect her thoughts, Best began to tell Jensen about her conversations with the data controller engineering manager. “The engineering manager for the data controller just left my office. He recommended a major redesign of the device to his senior management team.”

“I see, and the schedule impact,” asked Jensen.

“They haven't announced anything yet, but he's estimating three months,” replied Best.

“Wow, that's on the high end of our estimate,” said Jensen. “When are they going to officially announce the delay?”

“Probably within two weeks. They need some time to hammer out the details and draft the communications to their customers,” explained Best.

“I guess my news is even more significant now,” said Jensen. “The team worked out the design changes that are needed to the existing Santiam product. And they are confident that they can include all the key Rattlesnake features customers are looking for. We just don't know the time line yet.”

“That's great news, Ken. Commissioning a team to go off and look at design options was a brilliant move,” said Best.

“Yeah, I guess that's why Vivek is running the business; he saw this coming,” replied Jensen.

“Let me know how you want me to proceed on my end, Ken.”

“Will do,” replied Jensen. “I'm going to try to catch Vivek before I leave today to give him a heads-up on both developments.”

Jensen was hoping to talk with Rondi before leaving work for the evening as he really didn't want to sit on the news overnight. As he walked down the office corridor, he could see that Rondi's office door was still open, a sign that he was at least still somewhere in the building. As he got to the office, he saw that Rondi was on the phone. As Jensen turned to leave, he noticed Rondi motioning for him to come into his office. Within a few minutes Rondi finished his call and turned his attention to Jensen.

“Hi, Ken. What can I do for you?” asked Rondi.

“Hi, Vivek. We've had a couple of significant developments that I wanted to brief you on before you left today,” replied Jensen. He then explained that he had just finished a conversation with Best, and that the data controller device had to go through a major redesign. “They haven't officially announced it yet, but the engineering manager gave her a download after he briefed his senior management team.” Jensen took a deep breath, and then continued. “The impact is on the high side of what we were estimating—probably a three-month schedule slip, I have updated the program strike zone to see what this would mean to the program business case.” Jensen and Rondi studied the updated strike zone (Figure C.2).

It was clear from the strike zone that the program business case would no longer be viable with a three-month delay to the program. Rondi collected his thoughts, and then responded. “All right, how's the team that's looking at a refresh design of the existing product coming?”

“That's the other development that I wanted to talk to you about,” said Jensen. “They were able to rework the design to include many of the key features of Rattlesnake, but we don't know how long it will take yet.”

“Okay,” responded Rondi, looking a bit more relieved. “Go work out the most aggressive schedule possible for Santiam, assuming availability of all resources needed. Get back to me within the next two days.”

“Will do,” said Jensen. “What should I tell the Rattlesnake team?”

“Nothing yet. Until Tojamma officially announces the delay of the data controller device, we need to keep everyone focused on what they're presently doing.” Jensen nodded in agreement.

As Jensen began his commute home, he knew he had some time to assess the current situation and think about his next steps. It was now very likely that the Rattlesnake program would be cancelled, but only if the Santiam refresh would be available within 60 days of the original Rattlesnake launch date. He knew that the company wouldn't have the market leader position with this product now, but he believed they could maintain much of the sales goals if they launched the product at the same time as their competitors.

Applying Triage

The Rattlesnake program was entering a very awkward state between now and when Tojamma officially announced the delay of the data controller device. Jensen had a real balancing act to perform. He needed a few team members to begin planning their activities for a redesign of the Santiam product, he needed to delay work of teams that he knew would be throw away work if performed, and he needed to keep the remaining project teams focused on business as usual. In the next program core team meeting, he informed the program leaders that they knew Tojamma was going to announce a delay in the data controller device.

Jensen began the meeting with his announcement. “As all of you know, Tojamma has been faced with a potential redesign of the data controller device. We learned yesterday that they will indeed have to redesign a portion of the device.”

Jensen paused while the program core team had a chance to absorb the news. Groans of frustration and several disparaging comments about Tojamma were expressed. The software project manager, Lynda Gould, was first to ask the question that was on everyone's mind. “How long is the delay?”

“We think as much as three months, but Tojamma hasn't officially announced their plans yet.”

“Three months will kill this program,” said Mike Acosta, the visibly upset validation project manager. “Are you telling us the Rattlesnake program has been cancelled?”

“No. No decisions have been made yet. Not until we get the official announcement from Tojamma. I'm sure they're trying everything they can to pull the delay in—they're aware of the impact of a three-month slip.”

Jensen could see his team members relax a bit. Cancellation of the Rattlesnake program would be hard for the team to swallow. Many of them had over a year's work invested in the outcome of the program. He continued by explaining that Rondi had authorized a contingency plan with a small team to look at what it would take to put the key features from the Rattlesnake product into a redesign of the existing Santiam product and that initial assessment looked promising. Jensen informed the team that there would be a decision on the future of the Rattlesnake program within two weeks.

The decision didn't take two weeks, but two days. Tojamma announced that the redesign of the data controller device would take between eleven and fourteen weeks. Once this information was relayed to Rondi, he summoned Jensen into his office for a conference.

“Tojamma's schedule slip puts us outside of the market window,” began Rondi. “The Rattlesnake program is dead in its tracks. We either get a redesigned Santiam product out there within two months of our original launch date, or we don't put a product out until next year's product cycle.”

“The team believes they can get the redesigned Santiam product out sooner than two months,” responded Jensen. “More like five to six weeks from the original Rattlesnake launch target.”

“All right, we pull the plug on Rattlesnake and go for the redesigned Santiam product. You and I will announce it to the team in the morning. Please set up an all-hands meeting for 9:00.”

“Will do.” Jensen's head was still reeling from how fast the decision was made. No extended pondering, no overanalysis of “what-if” scenarios. Boom, it was done. Jensen went back to his office to send out an email about the next day's all-hands meeting.

There Is Always a Lesson

The basis for terminating the Rattlesnake program was because the program business case fell apart due to the failure of the development partner to meet the schedule. However, this was a documented and understood risk that was factored into executive decision making from the beginning of the program. Given this, one can debate whether this program was a success or a failure.

Jensen took away two key lessons from this program. First, it is critical to understand your program risks. The risks need to be analyzed, then prioritized based upon their potential impact on the critical business success factors and which of these risks are probable showstoppers. A good guidance system is needed to ensure a program is positioned for success and stays on course. The program strike zone was the guidance system that enabled the decision to terminate the Rattlesnake program and focus the team's efforts on delivering the redesigned Santiam product.

Final Thoughts on Program Management

It's about the business! Whether your business is to make a profit for your shareholders or to provide benefit for your benefactors, this is the central program management theme carried throughout this book. When applied to its full capacity, program management provides the much-needed link between business strategy and the operational outcomes of project teams.

We began our personal journeys in program management with an understanding of how this link is established and maintained within the companies and industries in which we worked. As our journey has continued through writing, training, coaching, and consulting we have been fortunate to witness people applying the principles of program management contained within this book in ways and within industries we never imagined.

Consider some examples: the software product development company that is using program management to ensure its agile software development processes produce outcomes that remain aligned to its strategic business goals while providing iterative features to its customers; or the nonprofit energy efficiency company that is using program management to structure and manage its highly complex initiatives to achieve market transformation goals; or the product strategy and design consultancy firm that uses program management to provide stability and business focus in a highly creative design environment; or the university that uses program management to ensure curriculum is aligned to market need for the highest relevant and practical value from a student and hiring company perspective as well as meet the needs of accrediting agencies.

The utilization of program management to drive the realization of business benefits requires all actors within an organization to understand and perform their role appropriately. Whether you are a business executive, part of the middle management team, a program manager, a project manager, or an individual contributor on a program team, you have a critical role to play in order to ensure both program and business success.

We hope you have enjoyed this journey through the world of program management. We encourage you to contact us with your feedback, suggestions, and personal experiences in program management. Finally, you can find additional information, resources, and assistance at the Program Management Academy (www.programmanagement-academy.com).