Category Archives: risk management

Four PMBOK Inspired Tips For Success On Complicated Projects

imagesCMHQ1JHK1) Stakeholder Management: Attain clear support from the executive stakeholders from the beginning of the project and schedule regular check-in meetings with them ahead of time as they tend to be very busy and are often pulled in many directions.  Set the tone that their participation is needed and that they will need to approve change requests which is not uncommon.  You should also use clever people skills and empathetic listening skills as you interview the many high-level stakeholders in the early part of the project so as to diffuse conflict and get consensus on disagreements about scope, business goals, order, and to find out who will be the thorn in your back as the sooner you know that the better.  Also, accept that stakeholders will be different and they may not even directly work for your company which is ok as those ones tend to offer specialized expertise and are often very creative.

2) Communications Management: It’s common to have one or two stakeholders who are difficult, protesting the project through their actions, or who are otherwise egotistical, and/or just plain difficult to deal with.  As a project manager, project consultant, or business analyst, it is your responsibility to deal with these people and situations.  One way to do this is to understand the communication styles of all project stakeholders early on in the project and document this.  Strength Finders, DISC, and many other communication style tests can help with this or you could consult a person who has a lot of international travel experience – they are often helpful understanding group communication dynamics.  You should also know when to be direct, indirect, and/or silent in your communications.  Communication is mostly about listening and perception and as project manager you are not the direct boss of the project team members so your ability to drive tasks is heavily based on your communication and motivational skills – so ask all team members what you can do to clear their roads either yourself or in partnership with other stakeholders.  This reduces surprise road blocks down the road and encourages silent people to speak up.

Project Mgmt3) Quality Management: Having worked on many complex projects in highly regulated industries over the last 5 years I have noticed a shift towards agile methodologies vs. waterfall.  From my perspective this is really about quality and timely flexibility.  Aligning the project tasks in small pieces allows you to test the results independently and faster, and if the results are bad that’s a good thing because it’s just one piece of the project and you can learn from it – getting an early warning.  Yet to get better quality out of an error you need to have documented what went into the error from beginning to end and you need intelligent consensus.  On SDLC projects there will be many small errors which then raise questions about other systems and how they relate to the business rules.  Yet with good process flows, screen shots, and JAD sessions with key people, you can ensure that these errors are nothing more than normal bumps in the road.  Every project has its bumps but the real test is having above average quality on budget and on time at the projects end thus creating a reusable plan others can learn and be inspired from.

imagesRIPQVZGS4) Risk Management: In this new era where almost everything is in the cloud and hackers are targeting large and mid-sized companies to steal and sell their data, every risk analysis document/plan should take into consideration data security, customer privacy, access controls from the project team, and there should be an independent audit plan – often out of scope of the project and done by a different group for checks and balances.  No project has no data so data is always a part of a project, sometimes more and sometimes less.  Question number one is who should have access to the data and at what point?  In today’s environment you should embrace a need to know policy and you should document that to reduce risks.  You should also imagine a worst case scenario and be prepared for it and run this by the executive project sponsors, and/or risk officer if your company has one.

Another common risk is project delay.  Have you analyzed how a one or two month delay would affect your critical path and logical task order?  For some projects it may not matter and for others it may cost your project millions more.  It may harm another dept. or a related project thus in your project risk document you should list the longest delay your project could handle and the dependencies of that delay.  Delays on projects, especially SDLC projects, do happen and are not necessarily bad and they can be dealt with but your project team needs to be ready for it and the sooner they know the better.

If you want to hire me to speak at your next event or consult for your company on these and related topics concerning project risk, process improvement, project management, and related areas please contact me.

Former FDIC Chair Shelia Bair Comments On Bank Bailouts, Peer-To-Peer Lending, And Tax Reform

On Tues, 04/08/14, former FDIC Chairperson Shelia Bair visited Minneapolis and offered commentary on the financial services industry, peer-to-peer lending, systemic risk, and the recent recession.  Bair is educated as an attorney and was Assistant Secretary for Financial Institutions at the Treasury Dept. and a professor at the University of Massachusetts Amherst before she moved over to Chair the FDIC from 2006 to 2011.  At the FDIC Bair helped the nation’s financial system out of an exacerbated recession and unprecedented bank run from 2007 to 2010 but not without ruffling a few feathers.

Addressing a sold out crowd including former Congressman Tim Penny and other elected officials, business people, students, and ethically minded community members, Bair had the honor of being the keynote speaker at Saint Mary’s University of MN’s publically broadcasted Hendrickson Forum on Ethical Leadership.  Bair opened her keynote by describing how unimpressed she was that when she arrived at the FDIC in 2006 the organization had little to no info on sub-prime lending and had to buy a database to conduct research on it.  This was in part due to the fact that sub-prime lenders were private and not a part of deposit institutions and thus slightly out of scope for the FDIC at that time.  Bair did not inherit a perfect FDIC, and it can be inferred that the FDIC should have been paying attention to sub-prime lending far sooner as it was directly related to many elements that affect deposit institutions including real estate, entrepreneurship, income and tax, and community redevelopment.

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Bair now free from the constraints of holding a Washington office spoke openly about how she felt hindered to speak to the human element of the financial crisis while at the FDIC.  She indicated that although she was a part of the team that brokered the historic bank bailouts (2008-2009), that she has some serious reservations about that, because it was “too generous and uneven” and “helped the banks far more than it helped homeowners and families”.  She also described regular disagreement with then Treasury Secretary Timothy Geithner and suggested he was too close to many of the bank executives who benefited from the bank bailouts.

She further described miscommunication and lack of collaboration as Geithner worked around her efforts at the FDIC, and the undertone of this was political disagreement over which agency should lead the recession resolution in terms of the banking industry.

At present, Bair supports the Dodd-Frank Act because it favors bankruptcy and a three-year claw back for executives over a bailout in the event of a bank failure.  Although Bair in the past has said she disagreed with Janet Yellen’s support to repeal the Glass-Steagall Act, she presently indicated she still supports the new Fed Chair and viewed her as a reliable Washington outsider.

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When I directly questioned Bair on the growth of peer-to-peer lending she seemed cautious about its long-term viability citing an unknown regulatory landscape and even recounted that peer-to-peer lender Prosper lost many investors during the worst months of the recession.  In discussion with Bair I observed that she, like many banks, is in a wait and see mode with peer-to peer-lending, but she did indicate that for customers consolidating higher interest rate debt it can be a good thing and that could in turn force banks to be more customer centric with better terms.

Yet I am more optimistic on peer-to-peer lending than Bair in partnership with many respected peer-to-peer investors including Google who invested $125 million in Lending Club and the former CEO of Citi Group, Vikram Pandit.  It is really telling when the former Citigroup CEO goes against his own industry in favor of a tech-heavy new lending model, but he is right because most customers no longer need the big bank branches and elaborate services that are fee heavy.  Moreover, peer-to-peer lenders offer attractive rates, diverse portfolio options, and low operational costs and that keeps investors and borrowers happy.  Just like online news slaughtered traditional print media, as soon as peer-to-peer lending gets more regulatory backing it will slaughter traditional fee-heavy banks if they don’t adapt to this new environment.

When commenting on federal sequestration Bair showed frustration and disagreement over the automatic spending cut approach and instead suggested that tax rates be reduced and restructured in a number of areas to encourage more employment, keep businesses in the U.S., and encourage business innovation which would in turn provide more income and employment thus bringing in a greater amount of taxable income to offset her proposed tax reduction.  This truly can be a helpful aspect of the budget deficit issue in that taxes in the U.S. are far too high and there are some needless loopholes that harm many and help few.  The 2.3% Medical Device Tax is an example of this as it encourages the many medical device companies in MN to move their operations outside the U.S. due to the high tax cost, and it adds to their cost of doing business thus reducing their ability to get favorable loans.

Lastly, as an advocate for consumer protection and creative thinking I asked Bair if she had any insight on what the massive Target data breach might mean for the banking and related industries — where an estimated 10-15% of the 40 million affected cards have encountered some type of fraud — and she reminded me that the banks are taking the losses before the retailer does.  Although she offered no specifics other than suggesting that debit cards are more relevant, she shared my concern that data security is a growing factor in financial regulation yet I was then reminded that Bair is more of a politician and economist than a technologist.  Yet from an economic policy standpoint if the nation encounters more data breaches like this it could drive the cost of goods up thus forcing more costly and secure card payment products perhaps with biometrics on them.

Photos by Rick Busch.

Written by Jeremy Swenson (c)