Posts on Aug 2020

The One Year, Thirty Minute Challenge :: Week 35 :: Finance :: Capital Budgeting

It’s that time of year when companies look at their capital budgets for the upcoming year. Capital budgets differ from operating budgets in a couple of important ways. Capital budgets represent a trade – swapping one type of asset for another – $30,000 in cash for a $30,000 delivery truck, $100,000 in cash for a $100,000 enterprise software package. These capital purchases are reflected only on the Balance Sheet. Later, they make their way to the Income Statement and Balance Sheet a chunk at a time using an accounting mechanism called depreciation. Depreciation is driven by the “class life” for each capital purchase. At the time of this writing (August 2020), IRS guidelines set the class life for real property at 39 years, office furniture at 7 years and autos and trucks at 5 years. So, for our $30,000 delivery truck example earlier in the paragraph, we’re spending the physical $30,000 in cash now and reflecting the purchase only on the Balance Sheet – the cash comes off, the truck goes on. Going forward, we’re going to recognize the depreciation on both the Income Statement and the Balance Sheet. Each year, for the first five years we own the truck, we’ll see $6,000 of depreciation expense on the Income Statement and $6,000 removed from the value of the truck on the Balance Sheet (in actuality, it will be accumulated in a single account with all the rest of the depreciation). Conversely, operating budgets are for those expenses that don’t represent a “swap” of assets. Salaries, utilities, and every other non-capital expense happen here. The accounting piece is very simple – reduce cash (on the Balance Sheet) and recognize the expense (on the Income Statement).

The goal of this week’s One Year, Thirty Minute Challenge, is to begin building a capital budgeting process that you can use this year and sharpen in the upcoming years. Keep using it and refining it so it always serves your organization well. Here’s a high-level outline. Your job is to flesh out the steps and fit it to your organization.

Let’s jump in –

Identify Potential Capital Budget Items – The company’s strategic direction and operational necessities should drive this part of the exercise. Typically, there’s no shortage of items clamoring for your capital expense dollars. You might want to enter a new, promising market that requires a new office, new equipment, or new vehicles. You might have to replace worn-out factory machinery or desktop computers to continue existing operations. You might need new equipment to comply with recently mandated government environmental regulations. You might be able to lower manufacturing costs by capitalizing on a new process, but it requires retooling the factory.

Estimate the Financial Impact of the Proposed Capital Budget Items – Using the best information you can gather (from vendors, from your sales, operations, and finance experts) determine the financial effect of the proposed projects on your organization. What will the item(s) cost to obtain? What will the item(s) cost to operate in the first year and all subsequent years? What additional revenue will the item(s) generate in the first year and all subsequent year? If the items are available from multiple vendors, compare item features, benefits, costs, and expected revenues for each option.

Evaluate the Proposed Items and their Financial Impact – Typically, you’ll begin your capital budgeting process with a pool of money you’re ready to devote to capital projects. After you’ve gathered all the information during the previous step, you’re ready to evaluate the proposed projects, hopefully using more science than art. Regulatory compliance gets first dibs since failure to comply could put the ongoing operation of the business in jeopardy. The remainder of the projects should be evaluated by the finance folks using some tried and true capital budgeting metrics that we’ll discuss shortly, but a couple of things first. In many cases, the money to be spent will come from cash on hand. That money isn’t free. If it sat in an interest-bearing investment, it would have a return. For purposes of discussion, let’s say the return on the cash on hand, if left in the investment, is 3%. The return on investment for the proposed capital project needs to be more than 3%. If the money for the capital project is going to be borrowed at an interest rate of 5%, the return on investment for the proposed capital project needs to be more than 5%. You get the idea – the return on the project needs to be more financially beneficial than doing nothing. Clearly, regulatory capital expenses get a mulligan here. There may be no financial benefit to the project. In fact, there might be only financial detriment. But, most likely, the financial detriment is far less than the impact of closing the company. In these cases, the increased costs must be passed along to consumers or be borne by stockholders in the form of lower profits.

Let’s talk about five of the most commonly employed methodologies for evaluating capital projects –

  • Payback Period – How quickly will the cash inflows generated by the investment pay back the initial investment? If the initial investment is $10,000 and the investment generates $5,000 a year in additional cash, the payback period is two years. This method is quick and simple, but it doesn’t take into account the value of cash inflows after the payback period or the time value of money.
  • Net Present Value (NPV) – This methodology compares the present value of all future cash inflows resulting from the project versus the present value of all the current and future outflows required to execute the project.
  • Profitability Index – The present value of all future cash inflows associated with the project divided by the present value of the current and future cash outflows associated with the project.
  • Internal Rate of Return (IRR) – This methodology identifies the rate at which the project breaks even by examining the cash inflows and outflows.
  • Modified Internal Rate of Return (MIRR) – This methodology is similar to the IRR except that it recognizes that cash inflows can be reinvested at a rate that is different than the rate at which they were generated.

Each of the capital projects under consideration must be evaluated in light of these financial metrics (and possibly others). The purpose of this week’s exercise is not to get deeply in the woods, but there are always additional considerations like tax consequence and accounting methodologies. Your finance folks can guide you into a complete discussion.

Most years, you’ll have more potential projects than you have money. The objective measures above will help the projects with the highest return on investment (ROI) bubble to the top.

Occasionally, you’ll be choosing between proposed projects with similar returns – sometimes offering mutually exclusive options. At that point, the “art” kicks in. The projects that most successfully move your strategy forward, the influence of non-financial data (market sizes, trends, patterns), management knowledge and intuition, and more will inform your decision on which projects to pick and which projects to reject or defer.

Implement – After the winning projects are selected, execute like crazy. Depending on the type of project, you might need to create a project team (hope you included that in your capital budget). Create schedules with timelines and milestones, align vendor resources, employ a solid execution framework, and communicate well. You want to implement the project as quickly as possible so it can start generating the cash inflows.

Measure – The capital budgeting tools were forward-looking. After implementation, rigorously track the actual results. Hopefully, the project is performing better than you projected. However, one of the worst mistakes a company can make is succumbing to “sunk cost fallacy”. If a project is seriously underperforming and there’s no remedy in sight, it’s noble to pull the plug. The fact that you’ve already spend $50,000 or $5,000,000 becomes immaterial. Continually investing resources with the hope that the project will magically turn around is a mistake rooted in pride. Track the performance of each project so you have better information for your next round of capital budgeting.

Capital budgeting, many times, represents an opportunity to make a big leap for an organization. A new market, product, process, or system can catapult a company into the national spotlight or into a level of revenue never even dreamed of before. Take this exercise seriously.

The One Year, Thirty Minute Challenge :: Week 34 :: Strategic Planning :: Creative Destruction

Someone else would like to take your customers. Any time an industry, company, product or service attracts a crowd (and the revenue the crowd generates), there will be host of fast followers who show up and try to siphon off some of that revenue for themselves or try to grow the size of the market so they can have a piece of the market share and revenue.

Those fast followers have a few options – create a better version of the original product or service, create a cheaper version of the product or service, create a product or service that is complimentary to the original product or service or re-solve the original problem in a radically different way – rendering the original product or service obsolete.

Let’s illustrate with personally curated portable music. For years, portable music took the form of radio. Other than choosing a station that played the genre of music you liked, you were unable to curate your own listening. Then, in the mid-1960s, Bill Lear (of Learjet fame) invented the 8-track tape player (I had one in my first two cars). You were able to choose albums produced by your favorite artists. It was subsequently replaced by cassettes (again complete albums), then CDs (still complete albums), then downloadable digital songs (on iPods and similar MP3 devices) and now streaming online music (the latest two both offer choices of mingling genres, albums and individual songs). Each of these successor technologies destroyed the commercial viability of the previous technology. Companies that failed to embrace the successor technology became irrelevant and, in some cases, closed their doors.

Recent history is loaded with companies that failed to re-invent their value creation proposition and paid the price – Blockbuster, Kodak, Polaroid, MySpace, Yahoo, Blackberry – just to name a few. These all have a tech component but there are plenty of non-tech related companies that have failed to remake their value creation activities – Toys R’ Us, Sears, Radio Shack, Borders, Circuit City.

Joseph Schumpeter popularized the term “creative destruction’ in his 1942 book Capitalism, Socialism and Democracy. According to Schumpeter, the “gale of creative destruction” is the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”. This is what makes capitalism an engine for creating wealth for those who identify a problem and find a commercially viable solution to that problem. At the very same time, those who cling to solutions that are no longer commercially viable will find their ability to create wealth wiped out.

Let’s jump into this week’s One Year, Thirty Minute Challenge. I have three goals for this week’s exercise –

  • I want you to examine your value creation activities for your existing product or service.
  • I want you to ponder successor products for your existing products or services.
  • I want you to examine the competitive landscape for someone who is introducing a product or service that poses a threat to your existing products or services.

Value Creation for your Existing Product or Service

Your existing product or service might be in demand and effectively solving a customer’s problem. That’s great. But what if a competitor could introduce a similar product, but at half the price due to a new manufacturing technology? Not all creative destruction means retiring or remaking an existing product or service. It might mean destroying and remaking the methodology for creating or delivering your product. Are there new technologies, new contract manufacturers, new materials or even streamlined processes that would allow you to manufacture your product or service faster, with higher quality or cheaper? Are there new delivery channels or options that would allow you to get your product or service in the customer’s hands faster, cheaper or with a better customer experience?

Successor Products or Services

When you’re pondering creative destruction, the goal is not always a better mouse trap. Before cars were introduced, people just wanted faster horses. They never envisioned a “horseless carriage”. You’re after a better solution to the problem you’re solving for your customers – think digital camera vs traditional film or Netflix vs Blockbuster. Is there a better way to solve the same problem for your customers? Can you piggyback on other infrastructures or technologies? Can you partner with another company to create something that neither company could do on their own? Is there a methodology from another industry that’s never been used in your industry, but could be leveraged to solve your customer’s problem?

Surveying the Competitive Landscape

The worst place to be in the world of creative destruction is behind the curve. Someone else has already solved your customer’s problem in a better way and they’re already eating into your customer base. The early adopters have switched to the competitor’s product or service and it appears to be going well. One quick warning – the scrapheap of failed businesses is primarily populated by companies who got to this point and stuck their head in the sand – “Nobody wants a computer in their house”, “The internet is just a fad”, “People want real pictures they can hold in their hands”. Don’t be that company. Take competitive threats seriously. So, what do you do as you survey the landscape? If you’re still strong and the successor product is just getting out of the gate, they might be an acquisition target. In the right circumstances, you might be able to buy them outright. If they’re undercapitalized, they might need some cash to grow and you might be able to buy a significant stake and ride the elevator up with them. In other cases, you might be able to create a competitive product and leverage your brand, bigger war chest and existing customer base to beat back the new entrant.

The big idea in this week’s exercise is to never be lulled into complacency. Great companies earn it every time they go into the marketplace. They reexamine their products, services and delivery methodologies to make sure they are always solving the customer’s problem in the best way possible.

The One Year, Thirty Minute Challenge :: Week 33 :: People :: Core Values

There has to be some mechanism by which employees gain admittance to your organization. Clearly, if you run a hospital and you need a thoracic surgeon, you’re looking for someone with the right education, credentials and experience. You employ a similar approach if you’re hiring a plumber, chef or accountant. But down through the years, hiring someone just because they have the right technical skills has resulted in a breathtakingly large number of terrible hires. “Qualifed” hires have produced sub-par work, destroyed morale, denigrated co-workers, undermined bosses, abused customers and committed a truckload of other organizational “sins”.

If technical skills are only one part of the screening process, what else should it include? In my opinion, you start with the core values of the organization. Core values are the personal and professional beliefs of the founder(s) that make their way into the behavior of the people in the organization. They’re manifested in the priorities of the organization. They are the personal rules the founder(s) would live by no matter where they worked. They are the personal rules that the founders would follow even if they became detrimental to the organization. They are the non-negotiable ideals that govern interactions within the company (team member-to-team member), with customers and with vendors. To borrow a phrase from the US founding documents, they are the truths that are self-evident. Employees who don’t embrace and live out these values are destined to feel out of place in the organization.

Some things in an organization are a creative process – writing a mission statement, defining a vision and, to a certain extent, even building a culture. But identifying core values is a discovery process.

When I do a core values exercise with a client, a few “values” surface immediately – honesty, integrity, hard-working. I always make clients throw these out. These “price of admission” values don’t count. No employer goes looking for employees who are dishonest, morally bankrupt, or lazy. The core values you’re after are those 4 – 8 overarching ideas that make up your organization’s behavioral compass.

I’m always reluctant to use my company to illustrate a point but in this case, it might make sense. Here are three of the core values of ClearVision Consulting –

  • A love for small business owners – I hold in the highest regard those people who have risked their personal wealth and banked on their God-given talent to uniquely solve problems for their target clients. Their desire to build a better life for themselves and their families must be celebrated. They deserve to have someone in their corner equipping them and cheering them on.
  • A desire to dig deep and understand the client’s business – I will learn as much about the client’s business as they will allow me to learn. Over the years, as I’ve done research into process improvements or created strategic plans, I’ve loaded produce on a truck, checked in resort guests, stocked shelves in a store, sat in board meetings, sat in staff meetings, conducted interviews, evaluated vendors, written SQL code and a few hundred more things. More times than I can count, I’ve fielded calls from executives who had questions about how things work inside their organizations and I’ve been able to answer them because I’m intimately familiar with their work. If I don’t know the client’s company intimately, how can I help them craft strategies that will take them where they want to go and remake processes that will transform their value creation activities?
  • A commitment to treat client resources like they are my own – before I recommend that a client spend money, hire or fire an employee or invest in a new product or market, I ask myself if I’d make the same investment with my own resources. They deserve someone who will preserve their hard-fought-for capital.

If someone came to work with me and didn’t hold to these values, they’d never survive in the organization. This is who I am and, as far as I’m concerned, this is how business should be done. This is the way core values work. They are heart-felt beliefs that translate into real-life actions in the organization.

Before we jump into this week’s exercise, let me remind of how you’re going to use your core values. I used employment as my opening example and that will be an important application, but you want to use your core values to judge all future associations. If you use vendors who share your core values, they become true partners. If you market to customers who share your core values, they become strong referrals partners for you and might even give you a couple of mulligans if you drop the ball.

So, how do you find the core values of your organization? The answers to these questions should get you there.

  • What business behavior makes you mad when you see it? Why does it make you mad? Which of your closely held values is “offended”?
  • What are the worst ways your employees could drop the ball? What could they do that would ruin your company’s reputation? Lose customers? Make you feel ashamed of the company? Which of your closely held beliefs about how to do business are being violated?
  • If you worked for another company, what personal rules would you live by (taking care of customers, looking out for the company’s equipment, etc) even if the company’s rules were less stringent?
  • What behaviors would you maintain even if it were detrimental to the company financially?
  • What behaviors do you admire in other people and companies and seek to emulate? Why?
  • When customers speak favorably about your company, what qualities do they cite? What did you or your employees do to make them get that vibe?
  • What are the jointly revered business beliefs and behaviors in the core team (the people who’ve stuck around the longest and who constitute the DNA of the company)? What makes them stay and stay loyal?

Get answers to these questions down on paper or a whiteboard and connect some dots. What themes surface? Look for approaches to work (e.g. data-driven decision-making or brutal honesty among team members), approaches to customers (e.g. highly tailored solutions or first call problem resolution) and operational priorities (e.g. work products that don’t require rework or open book management). Select four to eight and include a short description with each one. Here are a couple of examples –

  • Balance – we control our schedule and successfully manage our personal and professional priorities and accord that privilege and the trust that goes with it to everyone in the organization.
  • Rewarding – our work brings exceptional value to the client and enriches us personally and professionally.

Roll your list out to a few folks in the organization. Ask them, “Is this us?” If they say, “no”, ask them why not. That might indicate that you, as a leader, aren’t living out your values in the organization. Take their feedback and return to the drawing board. Repeat until you’ve got your final list.

After you have it, write questions to use in your interview process that help job candidates explain how they embody these values. If they don’t have the values, don’t hire them. Then use the values to vet vendors and write marketing content. You’re looking for people who, as Simon Sinek would say, “share your why”.

The One Year, Thirty Minute Challenge :: Week 32 :: Leadership :: Environment for Growth

If I’m listing the top five (maybe the top three) responsibilities of a leader, creating an environment that fosters growth absolutely makes the cut. An organization will most likely never grow beyond the person who leads it and individual divisions and departments will most likely never grow beyond the people who lead them. Unfortunately, we human being are wired for stasis. We run smack dab into Newton’s first law of motion, “An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an external force.” As a leader, it’s your job to be that external force.

During this week’s One Year, Thirty Minute Challenge exercise, I want to you to craft a framework that inspires and enables growth in your organization. The growth you want spans personal and professional, individual and team.

Use the ideas below like tools for your toolbox. Some of them I’d consider mandatory (like the first one) and others might or might not work in your organization. Pick and choose, add your own, then execute. Make lifelong learning part of your organizational culture (learning orientation is in my list of cultural imperatives. If you want to see my full list of culture imperatives, you can find it here).

Set the Example for Personal and Professional Growth – You should be hearing phrases like this come out of your mouth frequently, “I was just reading…”, “In the past, I would have…, but with what I’ve learned now, I’d…”,  “I had to apologize for…, because I found out I was wrong”, “My gut feel was…, but when I examined the data…”, “Swing by my office because I’d like to get your thoughts on…”. Spend time reading, taking a class, listening to a TED talk, journaling, and writing.

Embrace and Communicate that “Ego is the Enemy” – I’ve probably co-opted the title from Ryan Holiday’s excellent book a thousand times as I’ve talked and written. However, the real issue is whether or not I’ve embraced the message. We must never succumb to the temptation of thinking we know all there is to know about our job, our company, our customers, our people, or our processes. The minute we think we’ve arrived, the clock counting down our personal and professional destruction starts ticking. Advocate for personal and corporate humility. I often think about the encouragement from Gary Keller in his book, The One Thing. We don’t want to do our job the “best we can do it” (implying that our present capacity is the pinnacle). Instead, we want to do our job the “best it can be done” (implying that there’s more to learn and we’re going to drink it all in and apply it in our work).

Create a Mentorship Program – Pair mentees with mentors who will talk with them about professional growth, career paths, navigating office politics, balancing work and family responsibilities, moving from staff to supervisory roles and more. The mentor will learn just as much as the mentee. And you’ll automatically be building a couple of the factors that employees identified as indicative of solid management (see First, Break All the Rules by Marcus Buckingham). If potential mentors feel like this is outside their comfort zone, help them by creating a curriculum with discussion topics and resources.

Create an Environment where Good Risk is Embraced and Subsequent Failure after Good Risk is OK – If you never fail, you’re more than likely never doing anything that’s a stretch. People and organizations should do hard things. When the uncertainties surrounding hard things are pondered, good decision-making skills should be employed. Good decisions frequently result in bad outcomes (the batter frequently swings unsuccessfully at pitches that are low and away, but this time he hit a double). If your good risk appears to end in failure, you’ve at least learned some things (faulty product development, faulty delivery, faulting messaging). It’s never a bad thing to get an education.

Encourage Independent Work and Collaboration – Current research in productivity shows that neither bullpens nor private offices are optimal for the best outcomes. We need both. Employees need uninterrupted spans of time and privacy to do deep work (achieving flow). They also need engaging conversation with people who can challenge and sharpen the ideas they crafted working alone. Design workspaces and work schedules where both can happen.

Cross Discipline Knowledge is Golden – We have erroneously equated deep subject matter expertise with greater problem-solving ability in that discipline. For the sake of time, let me cut to the chase and say that thinking is wrong. In his book Range, David Epstein tells the story of two labs working on the same problem at the same time (proteins they wanted to measure would get stuck to a filter, which made them hard to analyze). One lab, staffed by only E. Coli experts, took weeks to solve the problem – experimenting with multiple methodologies. The other lab, staffed by scientists with chemistry, physics, biology, and genetics backgrounds, plus medical students, figured out the problem in their initial meeting. Deep subject matter expertise should be celebrated and leveraged, but to maximize peer-to-peer learning in an organization, utilize cross-disciplinary teams.

Make It Not All About Work – I know people who will come into an organization and do a Lunch-and-Learn on – Understanding Mortgages for First-time Homebuyers, Dog Training, Personal Finances, and Sleep. When your environment for growth includes growth opportunities for the whole person, you demonstrate another level of commitment to your team members.

Do the Traditional Stuff – Down through the years, employers have sent team member to seminars, enrolled them in online classes and paid for college degrees. Some of these might make less sense now, but there’s no reason to dismiss them entirely.

This is only a starter list, but it should get you on your way to creating a strong environment for growth in your organization.

The One Year, Thirty Minute Challenge :: Week 31 :: Project Management :: Framework

Every organization, from the solo practitioner to the multi-billion-dollar, publicly traded company has projects. It might be installing new enterprise software, building a branch office, or introducing a new manufacturing process. And, if you have projects, you need a solid project framework.

In this week’s One Year, Thirty Minute Challenge, I’m going to give you factors for successful project management then introduce a simple project management framework. If you don’t have an existing project management tool, I encourage you to use your thirty-minute exercise to customize this framework for your organization, then try it out on your next project.

Successful project management is about the stewardship of four resources – time, materials, money and people. Materials can take the form of a new software package or a pile of lumber, but most always represents an input that must be transformed during the project. People can take the form of employees, contractors or vendors who must be aligned, informed, and coordinated during the project. But only one of the resources is the most important – time – because you can’t make any more of it. There’s always a chance to earn more money, procure more materials and engage more people, but you can’t manufacture any more time. Consequently, time is the primary driver in project management. The crux of good project management is coordinating transformation activities (typically people + materials + time), so they happen on schedule, with sufficient quality, on budget, and in the right order. A critical piece of project management is understanding predecessor and successor activities. Predecessor activities are those that must either be started or, in some cases, completed before the next activity begins. Successor activities are those that are dependent on a predecessor activity. There are a host of software tools that can help you plot all transformation activities related to a project in a visual format and be a repository for all project related materials (documents, drawings, checklists, contacts, communication). The level of complexity and cost varies from tool to tool. No matter which one you choose, it can help you keep all the balls in the air. Here’s a list curated by The Digital Project manager. https://thedigitalprojectmanager.com/best-project-management-software/

Let’s jump in to this week’s exercise.

Here’s a simple project worksheet I’ve developed. Before you begin a project, I recommend you engage in, at least, this level of justification for the project

Project Title ___________________________________________________

Project Sponsor ________________________________________________

Project Team __________________________________________________

Project Cost:   One Time _______________  Ongoing _______________

Reason:

Maintenance of Current Operations _____    Cost Saving _____

Increased Revenue _____                                    Compliance _____

Improved Customer Experience _____            Improved Employee Experience _____

If Increased Revenue or Cost Saving, what is the amount? _______________

How does this project support the mission of the organization?

_____________________________________________________________

Briefly describe the project

_____________________________________________________________

What activities are required before the project begins (research, permits, etc)

_____________________________________________________________

Project Plan

  • Resources
    • People (employees, vendors, contractors) _____________________________________________________
    • Money (costs and payment schedule) _____________________________________________________
    • Materials (materials to be transformed and materials needed for transformation activities) _____________________________________________________
  • Timeline
    • Start date _______________
    • Target completion date _______________
    • Milestone events and dates _____________________________________________________
  • Predecessor Tasks and Successor Tasks (a successor task can also be a predecessor task for another activity) ___________________________________________________
  • Possible impediments __________________________________________
  • Training ___________________________________________________
  • What does successful completion look like? ____________________________
  • How will progress be reported? ____________________________________
  • To whom will progress be reported? _________________________________
  • Attach financial justification (Payback, net present value, internal rate of return)

Project Manager ____________________________________________________

Approved __________________________________________________________

During your exercise, review the available project management tools. Many include free trial periods, so for the first project scheduled after this One Year, Thirty Minute Challenge exercise, chose one or two that seem like a good fit for your organization and set up your project in both of those tools. Review the initial results with your project team and choose one and use it for the project.

Each project should have a project manager. This person’s job is to be cheerleader, communicator, coordinator, butt-kicker and problem solver. They should have a deep interest in the project itself and be able to articulate why it is important to the company. They should have not just the responsibility for the project, but also the authority to run the project team, manage project transformation activities, and spend from the project budget without being second-guessed.

The project manager should have a solid communication plan so that everyone on the team is always in sync and everyone else in the organization is up-to-date on the project’s progress. Project status should be communicated to the team at least weekly and to the rest of the organization at least monthly.

The project manager’s job is to drive the project to completion. When problems come, as they surely will, it is the project manager’s job to make course corrections, marshal the resources of the team to resolve the problems and refocus the team on project completion – all the time, keeping the balls of time, materials, money and people in the air.

After the end of every project, there should be a project post-mortem where the project itself is evaluated, the project methodology is evaluated, and the project leader and team are evaluated. The goal of this post-mortem is not to assign blame for anything that might have gone wrong, but to refine the methodology and improve the team for the next project.

If you begin to build a project management framework using these initial guidelines, you’ll be well on your way to effectively managing projects in your organization.