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The logical conclusion of a move toward the fully empowered project organization lies with the development of autonomous teams Sometimes known as skunkworks, after the famous Lockheed Corporation programs, autonomous project teams represent the final acknowledgment by the firm of the priority of project-based work in the company In these organizations, the project manager is given full authority, status, and responsibility to ensure project success Functional departments are either fully linked to the projects or the project teams are accorded an independent resource base with which to accomplish their tasks Again, as in the heavyweight project organization, the focus has shifted from the internal operating efficiency perspective to one that is aimed squarely at problem solving and, in this way, maximizing customer satisfaction in challenging projects The problem with autonomous teams often is, however, that although they are efficient tools in making challenging projects happen, in the long run, they often face difficulties When the focus is exclusively on problem solving, these teams
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Page 199 tend to overlook cost efficiencies and systems development and may become too expensive As a business model the autonomous team may be the right solution only in a very limited number of cases
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WHAT IS YOUR ORGANIZATION S PROFILE
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Heavyweight project organizations do not happen by accident Consider their own organizations in comparison to this chart If, as is likely, the majority find themselves working in functional project companies, there are some important points to remember in attempting to redirect the company s activities where they properly belong First, no one goes directly to the autonomous team stage when it comes to running projects This project organizational form represents the last transitional stage in a systematically planned shift in corporate thinking We gradually move to this step through making conscious decisions about how we are going to improve the way we run projects The three metrics that help us in this process are listed in Figure 101: role of the project manager, resources and power, and focus As we have discussed, successful project firms work to expand the authority of the project manager, often in the face of stiff resistance from functional department heads who like the power balance the way it currently exists Giving project managers high status, authority to conduct performance evaluations of team members, authority over project resources, and direct links to the customers are some necessary elements in redirecting this power balance Likewise, project managers who are constantly forced to rely on the good graces of functional managers for their team staffing, coordination, and financial and other resources already operate with one hand tied behind their backs Heavyweight project organizations have realigned their priorities away from functional maintenance to market opportunism That realignment only occurs when the resources needed to
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Page 200 respond rapidly to market opportunities rest with the project team rather than being retained at some highly centralized level Finally, as we have noted throughout this book, the shift in focus has begun to profoundly affect the manner in which the project organization, manager, and the team operate The new focus, on the external customer, becomes the driving force for operations, not simply one of several competing demands placed on the project team for them to satisfy as best they can
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MAKING A CUSTOMER-BASED APPROACH WORK FOR YOU
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If your company s goal is to successfully compete in the marketplace of the new century, you will in all probability be competing on the basis of projects: yours versus the other guys How you compete, how well you perform, and your long-term viability will depend on your project management savvy We have offered a new way of thinking about projects that has been successful when applied in a systematic manner It requires a critical examination of how your firm is currently running its projects, what your long-term goals really are (not just what you publicly state them to be), and how committed the company is to improving its processes In earlier sections of the book, we offered a template for creating the protocol to begin moving in the right directions In this final chapter, we would like to reemphasize some of the key steps in making customer-based project management work for you:
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Know your goals The number of organizations that have backed into project management never ceases to amaze us By this we mean the companies that have no overall understanding of project management, running projects, or using them as vehicles for new product development, system implementation, or corporate renewal These firms often layer projects over
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Page 201 their ongoing activities, appoint some internal people to manage the project, provide little training and support, and then profess surprise when the projects routinely fail These companies do not know their goals for projects They have not thought through the methodology for making project management work and have only the vaguest notion of what projects can do for corporate success Knowing your goals means to establish a meaningful, companywide project management philosophy, one that is followed by all members of the firm, starting at the very top Successful organizations often develop an overall operating framework that shows how all the parts fit into the whole Quality, supporting infrastructure, and integrated project management are all necessary precursors to the ability to successfully adopt the customer-based project philosophy Such a framework does not emerge by accident or happenstance Each layer in this model builds on earlier supporting levels Customer-based project management becomes the final completion of the philosophy This point is important because many times companies are too quick to adopt the latest new thing as a quick fix to problems they are experiencing Simply layering a professed interest in customers over a company that offers no supporting infrastructure or quality attitudes is a recipe for failure Realizing the full benefits of such a philosophy requires a goal, a plan, and the will to make it happen Remember who you work for Successful project organizations are relentlessly customer driven When conflicts arise, satisfying customer needs always serves as the tie-breaker Knowing who you work for has some important elements that have shaped our thinking throughout this book and in running our own projects First, it makes a firm goal of the need to establish good communication and nurture a partnering mentality with the customer, rather than one based on competing goals
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Page 202 and contention We have witnessed countless examples of the surprised and gratified reactions of our customers when they discover our willingness to go the extra mile to satisfy their needs This reaction tells us something; first, it indicates that a customer-driven emphasis is still the exception in the workplace, not the norm; second, it gives companies with a customer focus an enormous advantage in the opportunity for repeat business Institutional memory is a powerful thing When a contractor has gone out of their way to satisfy customers, they remember One objection we sometimes hear to this idea is best voiced by a project manager who stated, This focus is fine, but if you go too far the customer will just take advantage of you They will demand changes beyond the point they can be accommodated, push for price breaks and anything else they can get away with When we explored this point further with the project manager, it become clear that he or she worked for a firm that expected hostile relations with clients, routinely used contracts filled with restrictive terms, stiff penalty clauses and options for liquidated damages, and usually got the sort of relations they had come to expect Their abiding assumption was that the customer was the enemy, if not now, they would be sometime soon The key to avoiding this kind of expected escalation of conflict is to stop viewing customers as eventual foes in the project s development and recognize them publicly as full partners Customers seek to take advantage of the contractor when they do not fully understand the nature of the project s development; that is, when they are left in the dark One of the keys to solving this problem before it becomes a problem is full communication of the goals of the project and the success drivers of the customer together with active partnering and dual decision making When customers understand the implications
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Page 203 on bottom-line costs and development schedules of all the changes they keep asking for, they will recognize their joint role in making the project come in on time and budget Yes, change orders will continue to occur But with a mentality based on collaboration rather than the automatic assumption of hostile intent, the unnecessary change orders and long delays will be dramatically reduced Everyone recognizes his or her responsibility for getting the project completed on time Do your stakeholder homework Who are the key stakeholders in your organization Usually, there are two distinct groups: external stakeholders and internal stakeholders Externally, there is the client, of course, but there are other key groups as well Environmental groups, government agencies, competition, future potential customers are all examples of important external stakeholder groups that can positively or negatively affect how we manage our projects Internal stakeholders are the various departments, key personnel, or power centers that can affect how well your project development proceeds Once we have made the philosophical commitment to creating a customer-based approach to managing projects the next step in making the process work consists of doing our homework (ie, learning all we can) about these stakeholder groups What are their key goals How can we start to formulate plans for gaining the cooperation Business Goodwill Stakeholder analysis is complex because we have to recognize the various kinds of stakeholders, even within one client organization As we noted in Five, a client organization may have multiple stakeholder groups (upper management, technology teams, project teams, operator groups, and site teams) connected with our firm Stakeholder analysis first consists of recognizing these various impact players and then requires us to formulate strategies to attending to their diverse set of needs In some cases, we find competing needs at various levels or among
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Page 204 different stakeholders within the same client It may be necessary to meet and negotiate with the customer to establish their overall priorities Once we learn to recognize and communicate with the major stakeholders, we begin to formulate a systematic strategy for stakeholder management The key lies in active communication learning what it is they seek rather than simply assuming we know Recognize where you provide value Value chain analysis is a method for critically examining the operations of potential customers and learning the precise points at which our organization can contribute to their bottom line Aker Rauma Offshore uses value chain analysis to compete effectively in a highly competitive business environment Rather than presenting themselves as all things to all potential customers, they have adopted the customer-based project focus particularly to reduce potential risk for their clients They understand that the key contracting decisions made by customers usually arise out of two principle questions: What is their price to us and how much do we have to add by way of contingency to cover our risks In their pursuit of maximum customer satisfaction they have chosen to strongly focus on the risk side of the equation while striving to keep their cost competitive That is, we will do everything necessary to reduce your perception of risk in using us as a contractor As a result, they are extremely successful in spite of operating in an environment where the labor cost is higher than with many of their competitors They have perceived, correctly, that price is only one decision variable used by the potential customers Project firms that have adopted product thinking as part of their business philosophy are able to cover more uncertainty with less project specific planning and engineering than the ones that rely on working with any product concept and start each time with a clean slate Here product thinking involves
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Page 205 learning from the past experience and continuously developing the business processes, procedures and routines of the firm by taking these lessons learned into consideration Firms that have adopted the product thinking are able to utilize proven modules from their earlier projects in their current operation A great deal of the learning from the past is already incorporated into their systems and procedures that form the back bone of their delivery process Figure 102 shows the process by which project firms typically add value and reduce the risks associated with uncertainty Projects, even under the best of circumstances, come loaded with tremendous uncertainties At the outset, we may start with only a general goal or model in mind: for example, the statement, Here is what we are looking for During this early period, uncertainty is the rule As we gradually refine the goals, we begin to formulate a product concept The product concept is the concrete response to the perceived need for
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