Dec 31, 2010

The fall of Bombay's mills

Bombay's (Mumbai) Lower Parel area contains some of its swankiest offices and trendy clubs that symbolise the emerging urban India. Their calling cards have names such as Mathuradas Mills Compound and Kamla Mills Compound which are a reminder of the great city's 'brick and mortar' industrial past as a textiles centre east of Manchester and south of Ahmedabad, that other great Indian milling town.

Falling profits and soaring land prices, along with the strong-arm trade union politics of that era led to the closure of these mills and the loss of livelihood for thousands of mill workers. Astronomical sums of money are said to have exchanged hands between politicians, bureaucrats and organised crime in the selling off of this land.

The compounds, an area of more than 500 acres of uber prime property in the heart of the city, were sold off in chunks, leading to the offices and clubs that dot the mill premises today. I spent a year working in this neighbourhood and walking on evenings after work to the train station, could not help wonder about the noises and smells of the brooding, derelict worksheds, tool rooms and smokestacks that lay around me.

For a very readable history of Bombay's mills, see Darryl D'Monte's "Ripping The Fabric: The Decline Of Mumbai And Its Mills".  [Book review here, author interview here.] 

For an interview of Datta Samant, the trade union leader, see here
 

For a moving photo essay on the mills, see SloganMurugan's Mumbai Paused photoblog.

Dec 28, 2010

Inside India: The Bureaucracy​

[This is the first of a 'Inside India' series focusing on the government system in India, mostly from the personal point of view of working with government and public sector organisations.]

The India (and China) growth story is familiar by now to anyone who reads a newspaper. Googling through pages of The Economist, Businessweek (now Bloomberg Businessweek)​ and The Wall Street Journal, to name a few, one would be forgiven for thinking India and China are vigorously scrambling up the ladder of economic growth, and using this growth to eliminate poverty and underdevelopment, regardless of the various challenges they face. But if you were to look for, say, a week, at the front-pages of Indian newspapers and magazines you would come across a different story. ​​​

Reports and proclamations on Indian growth remaining steady in the face of a global economic crisis are more often than not on p.7. What occupies p.1 are myriad tales of corruption, breakdowns in public services and constant political skulduggery with a-scandal-a-week rate at which almost everybody in public office is linked to illicit sums of money or to shady real estate deals. ​​

In fact, after about a week of scanning such headlines, one would find patterns. One, the media - and it is almost always the media, rarely a proactive government investigative exercise - breaks a sensational story on corruption in high places. Two, the Indian parliament comes to a grinding halt, as opposition parties of various hues dig into the various pressure points in the ruling party's body that this story creates. ​Three, the party in power announces, after a bit of initial denial, the launch of a commission or task force to investigate and bring to book the guilty. Four, editors and television analysts churn out pieces on how 'change at the top level' or 'a fresh breath at the top' or 'a high powered committee' is urgently needed to remedy the situation and eradicate the weeds of corruption. Fifth, the government announces the resignation or transfer of a couple of big heads.

A good illustration of this cycle is the Commonwealth Games hosted by India. Plenty has been written and said about the sloppy arrangements, collapsing infrastructure and the rigged tenders that gave away contracts to firms at overpriced rates. Stories about the Games built up over a fortnight, as the launch drew nearer, exploded and by the time it had peaked, a big head had rolled - that of the head, no pun intended, of the Games Organising Committee. The scandals around the Games then quickly disappeared from the front pages and prime time news channel slots, as if the crowds have been satiated by this act of throwing a single man to the lions.

This cycle of events suggests two things: i) corruption, particularly grand corruption, in India is now 'cycling' at an ever greater frequency of peaks and ii) 'changes at top level' type of remedies have not worked. A good reason for this is the systemic corruption at lower levels prevalent in the huge bureaucracies of the executive, judiciary and the armed forces. ​​​In fact, 'fresh breath at the top' kind of changes have no effect on this type of organisation-wide corruption much as pouring water into a hollow bucket provides the appearance of a momentary increase in the level of water which subsides once the flow of water reverts back to normal.

This sort of organised predatory corruption is under the radar and is more corrosive than grand corruption as it is the kind of evil that a common citizen faces while trying to access basic public services. In fact, one could argue that to understand and improve India's development prospects is to understand and improve India's civil service.

This office-level corruption is the result of organisation wide distortions in India's public administration system. The distortions create incentives for subjective interpretations of administrative and legal procedure and creates scope for exercising personal discretion in the dispensation of a public service to cronies. And the distortions sustain these incentives, maintaining high systemic corruption at the frontline of government service delivery in everything from primary education to law enforcement.

In other words, this is not just a case of a corrupt politician fattening himself on a government contract or two. It is the case of everyone in the administrative system, to varying degrees, eating out of the same pot and then passing the pot around to a different set of people once a new government comes in.

There is a growing literature on corruption, not least in economics. They catch perceptions of corruption or how key macro variables are affected by macro levels of corruption. [For example, take Paulo Mauro's work on how corruption adversely affects economic growth.] Research of this sort and of the kind of 'corruption perception indices' brought out by agencies like Transparency International are useful in making the case for general action against corruption as an essential element of promoting growth.

However, what are the agency level factors that lead to corruption at a micro-level and how do these mechanisms work? Economics may not be the right lens to answer these questions. Business administration and management science are better equipped at tracking and sorting these mechanisms out. [An anthropological example of this type of work is the research by Robert Wade in South India on corruption in irrigation departments that control the canals needed by farmers to water their crops.]​

Based on my experience of working as a consultant to government agencies and, now, as part of an international development agency working in India, I think that management and human resource management aspects of Indian ministries and government departments provide an explanation of why the quality of public administration in India is poor, corrupt and successful at resisting reform.

CORPORATE POLICY

For a government ministry or department, the equivalent of a corporate policy are the Rules of Business (ROB), a relevant Act and a Compendium of Rules based on the original Act. While the Rules of Business and the Act provide broad legislative pointers to how a government agency should work, it is the Rules that provide operational guidance on procedures.

While this system seems sensible at first glance, what has happened over time is that there have been no systematic and periodic reviews of the ROB or the Act. Consider what this means: India's government departments and ministries have a policy framework and legislative backbone that has changed very little from its colonial origins. This is obviously not very useful when it comes to the agency's real day-to-day job: implementing the legislative provisions of the Act.

To work around this, every year several new Rules or modifications to old ones are created once a situation arises where an old Rule has to be modified or a new one introduced. That is, what changes are made are reactive. The body of Rules grow steadily across many such compendiums or volumes till such time that only a handful of personnel, usually old clerks who have been in their chairs for about two decades, are aware of the outlines of the entire body of Rules and can refer to the relevant Rule if the situation arises. Without systematic, periodic reviews that phase out out-of-date legal provisions and accompanying procedures and introduce new ones, the entire policy framework on which a department rests is largely based on colonial era laws with several dozen 'adjustments' to it in the form of Rules.

MANAGEMENT INFORMATION SYSTEM

There are many mentions in popular literature of the infamous Indian government file that is pushed through its various loops by a well placed word or bribe or both. Since political independence, India's government machinery has amassed millions of files with documents recording every conceivable government-citizen exchange of services, grievances and complaints. The original filing system in the colonial bureaucracy was probably efficient for the times and perhaps deliberately designed to make colonial subjects run from pillar to post.

A file was created when a 'notesheet' recorded the first instance of an executive decision that needed to be taken. The lowest clerk recorded the facts of a case, the relevant legal provisions or procedures that applied and then passed it upstairs to his immediate superior. The superior officer in turn read the contents of the notesheet, jotted his opinion on the case in the margin, put his initials on it and marked it to his immediate superior. This went on till the notesheet acquired a chain of jotted remarks and signatures along the margin till the file went up to the highest level of a Principal Secretary who took the final decision if none of his subordinates had by then been able to or had the authority to take one. If the Secretary felt the need to look up a legal clause or needed more case information, back the file went looping downwards through the entire hierarchy again. The number of loops that a file had to go through depended on the underlying complexity of the business process and / or on the extent of ambiguity of the legal provisions relevant to that case. For a feel of what a typical government process looks like in India today, take the example below from an actual municipal corporation of a big ('metro') city.

Granting of a No-Objection-Certificate (NOC)



For a process like the one in the diagram, the file will bounce back and forth along a chain which will look something like this:

'Dak' or Correspondence File -> Lower Division Clerk (LDC) creates a file based on the complaint or request or claim or appeal that has just come in by post -> the Upper Division Clerk (UDC) processes the file, marks his notes on the margin -> the Section Officer (SO), a senior clerk then takes a decision on whether the file can be processed at a lower level or whether it needs 'interpretation' of the relevant legislation -> if shuffled upstairs, file goes to a Deputy Secretary -> onward again upstairs to an Additional Secretary -> onward again if need be to an Officer on Special Duty (who also doubles as an Additional / Deputy Secretary depending on the terms of service and seniority and available places left for promotion) -> and finally ends up on the desk of the Personal Assistant (PA) to the Secretary -> from where the Secretary will finally take a look at the file.

Any need for clarification or further information at any point on this chain will mean that the file is pushed back to the preceding link in the chain. ​Add several such loops if the file contains issues that need approvals or clearances from other civic agencies, departments or ministries.

Over time, this system has remained practically unchanged. [An indication of this is the recent move by the bureaucracy to mask the margin jottings that reveal the decision making chain from the clutches of India's new Right to Information Act under which it is mandatory for a government department to reveal inside information to a citizen on request.] With the phenomenal increase in India's population and the fact that government still provides almost all services to citizens, not just public goods and especially outside the big cities, the number of files has snowballed to a very large, unknown number. Unknown because there has been no census or government-wide time and motion type of study to track document load at each office.

The original filing system was organised much like an ancient university library with Index Files updated regularly for navigating the file classification system. Had this sort of system been diligently maintained, perhaps things would have lent themselves relatively easier to future automation.

However, the crucial Index Files are also not updated regularly which means that they are no longer a complete or accurate record of the archival system in government offices. The quality of the Index File rests on the regularity with which an Upper Division Clerk (UDC) or, more rarely, a Section Officer (SO) updates it. In practice, the File Index may contain a trace to the most-frequently- referred-to files. The rest of it lie there gathering dust or are thrown away in corners of the building or sometimes even trashed (to be honest, if files keep growing and there is no archival policy, where's the space?). There are virtually no computerised document management systems, though a few public sector enterprises are experimenting with such systems in recent years.

PERFORMANCE APPRAISAL

Performance metrics have to strike a balance between what is tangibly measurable and what is the right outcome to measure. Over time, this balance has gone haywire in government organisations in India. The all-important measure of performance of a department or ministry is the quantum of money spent in a financial year as documented by the all important Utilisation Certificate (UC). ​The UC certifies that a government department or ministry has spent a tranche of funds that has been allocated to it for a specific programme (or 'scheme' as it is known in India). The UC measures what its name suggests - how much of the money allocated to an office has been spent. It does not concern itself with the impact of the funds spent.​
In the Soviet-style centrally planned economy of the fifties, this may have been the only variable to track, though the logic is still hard to fathom, but in today's Indian economy where many products and services that were once produced only by government are now supplied by the private sector, this is a partially blind approach to measuring the performance of government programmes.
Scores of government ministries, line departments and other agencies in India still report 'performance' in this antiquated format, diligently filing reports on budgets spent without any data on whether the expenditure achieved any of the planned outcomes. Programme indicators are reported separately, if at all, unrelated to the programme expenditure and often at such levels of aggregation that it is difficult to comprehend the impact they signify apart from statements.
In other words, the annual report of a department will often quote something like"X training sessions completed for women artisans" while reporting on a programme, along with the total percentage spent out of the funds allocated to that programme without:
- explaining the which/why/ how of the outcome indicators chosen
- the innovations, if any, introduced in the processes needed to roll-out the programme
- the data collection approach and mechanism
- the type (internal / external) and frequency of monitoring and evaluation reporting and the resultant trends (e.g. did the key indicator have sharp drops in the middle of the programme and then rise up to its current level?)
- synergies or conflicts with other programmes run by the department or by other departments
The result is that what passes off as 'performance' monitoring in government programmes is a basic accounting appraisal in the shape of "how much was given to them versus how much did they spend" variety of reports.
At an operational level this translates into counting mostly input level indicators (number of training sessions, number of workshops, number of filed agents hired etc) rather than results of the programme (how many children cleared the test for numeracy after the training etc). ​
The Indian political system encourages this sort of skewed reporting. Indian politicians are wont to announce triumphant new 'schemes' once they are voted to office with a certain budget value earmarked. There is practically no discussion on underlying management processes and outcomes to be monitored and achieved. In fact, most of these announcements are in the form of renaming an existing programme with an increased budget allocation and launching it with a publicity blitz. ​

RECRUITMENT


When Qutb-ud-din Aibak died in 1210 A.D., who became his immediate successor?
(a) Iltutmish
(b) Taj-ud-din Yildoz
(c) Nasir-ud-din Mahmud
This multiple choice question is taken from the History paper in the Preliminary Examination ('Prelims') for the Indian Administrative Service (IAS) cadre, the most influential branch of the bureaucracy today. While the examination as a whole is gruelling and involves at least a couple of years of preparation, it has no relation to public administration or to the technical aspects of regulating, say, energy or telecom markets. Candidates ​can, and do, choose from a wide variety of liberal arts and science subjects. Masses of candidates, especially from states where technical education facilities are poor, choose subjects such as Hindi, English literature, History, Geography or Geology and clear the exam. These candidates then go on to handle ministries where specialist knowledge is often required. This situation is largely similar for many such premier 'Group A' services in the bureaucracy, although for very specific positions such as public sector bank officer examinations or positions in the civil aviation sector, there is no choice but to test the candidates on narrowly technical areas suitable for the job. 
What this results in is a deluge of civil servants with academic training that often has no relation to the kind of problems they manage in their career. A civil servant with a combination of geology ​and Sanskrit in the entrance examination could end up in her senior years heading the agency that regulates electricity tariffs. While one can argue that once selected, all civil servants are put through their paces for a year at an academy, this training is similar to an extended induction session that takes the new entrants through the minutiae of office and administrative procedures. Exhibit A is India's Department of Information Technology which is filled with civil servants of designations such as 'Scientist -A' but all of who are busy with routine paperwork instead of genuine research and development. This leads to a large information asymmetry between a government official tendering for a service and the private sector firm that provides the service. 

VACANCIES

If there is one fact about Indian government offices that you could bet on and consistently win, it is the fact that any ministry or department or agency office has on average a 20 per cent vacancy rate. Add to this another fact: at least half of those vacancies would be at the managerial cadre ('Groups A and B Level Officers'), not at support staff level, which impacts the quality of administration significantly.  This is a conservative estimate, some agencies have much more.
A thumbrule to predict the proportion of vacancies in positions for sanctioned posts (i.e. positions for which the government has officially allocated a line budget item for pay and benefits) is the political importance or rent-seeking ability attached to that office. ​A government office at federal level, to do with government procurement or regulation, is less likely to have vacancies than a district level office which simply implements programmes.
Shouldn't it be the other way around? After all, even if we assume that a developing country government do not have budgets to fully staff every office​, shouldn't resources be prioritised towards offices engaged in actual service delivery at ground level? No, because these lower level offices do not have the influence to generate rents so much as an enforcement or regulatory office located in New Delhi close to big businesses and corporate firms in India lobbying for minute but crucial changes in the policy landscape (the 2G spectrum allocation corruption scandal is a good example).
As an example, let us consider the network of vocational training institutions in India called Industrial Training Institutes (ITIs). One would think that with the daily additions to the discourse on competitiveness and the need to develop a skilled workforce, the ITIs would be a natural starting point to intervene by the government. Now, think about what the figures below show.



The data above relates to only management cadre officials, Assistant Director and above. Most positions have been lying vacant for 3-6 years. At the Director level - the institute head - some positions have been vacant for more than nine years. This is of course in addition to the other problems with these sort of government run institutions - outdated equipment, onerous reporting and accounting procedures, lack of performance pay for achieving targets but plenty of disciplinary measures for a minor deviation against some guideline or law written ages ago and other factors that are so typical of government service delivery in general, stifling initiative and rewarding conservatism and mediocrity.
The problems listed under these five points lead to corruption because they make it almost impossible for a clean, rational process with definite outcomes to be developed. Because of unclear policies, personal discretion is introduced by the bureaucrat (and politician) in interpreting the target recipients of a service. Because of weak Management Information Systems and a half-blind performance appraisal mechanism, targeting and outreach of government programmes and services can be diverted to special interest groups or not delivered at all by the bureaucracy. Because of a bureaucratic organisation that is riddled with vacancies especially at management level and a colonial era recruitment system, the capacity of the system to deliver even basic services is severely limited. All of these factors when combined with a population that is largely rural and poor lends enormous power to an Indian civil servant who then uses these to rationally maximise personal wealth and position in the bureacracy and selectively deny or provide services to generate rents.
A permanently weak system is a boon for the bureaucracy in terms of the magnitude of personal discretion it can exercise. Clearly, someone within the bureaucracy must be crazy to try and reform this system when the benefits accruing from a damaged system far outweigh the costs of fixing it. 
Yet top level policy pronouncements such as the Prime Minister's National Competitiveness Manufacturing Programme do little more than increasing the budget for a specially earmarked programme without reforming fundamental management level bottlenecks such as these. ​
The effect ​is that of pouring water into a hollow bucket.​

Dec 24, 2010

The Lottery of Life

I liked this ad campaign. A simple truth, well told. Thanks to Chris Blattman.


On Politicians

"I'll tell you what I really think about politicians. The other night I watched some politicians on television talking about Vietnam. I wanted very much to burst through the screen with a flamethrower and burn their eyes out and their balls off and then inquire from them how they would assess this action from a political point of view."

- Harold Pinter
RX4QZGRKPE9B

Dec 19, 2010

Conqueror: WS Merwin

Do people feel the same way about migrants as the powerful feel towards the vanquished?


"When they start to wear your clothes
do their dreams become more like yours
who do they look like

when they start to use your language
do they say what you say
who are they in your words

when they start to use your money
do they need the same things you need
or do the things change

when they are converted to your gods
do you know who they are praying to
do you know who is praying
for you not to be there"

Conqueror by W.S. Merwin

Dec 16, 2010

Speed date with the Indian IT Industry

This is a really quick introduction to the Indian information technology sector that I presented to faculty and students at Centro Universitario de Brasilia (UniCEUB). It was fun.

Reply to Dani Rodrik's blog post

[in reply to a paper and blog post by Dani Rodrik, 3.6.2008, here]

Dear Dani,

I just finished reading your paper. Other than the external versus internal validity issue, you point out that top journals may not have an incentive to publish the results of two identical randomized evaluations in different settings. Maybe this would have an adverse impact on the academic careers of the randomistas?

There are other practical issues that make it difficult for developing country organisations to carry out a randomized trial at ground level. First, a randomized evaluation is expensive (consulting fees and out-of-pocket expenses of a large team of field researchers plus faculty from an overseas college working in a project location to name the obvious). Few developing country organisations, let alone NGOs in these countries, can afford this unless they are propped up by corporate or donor agency funds (or by the funds of the university where the core team of economists come from).

Second, a randomized evaluation is time consuming and takes a year or more to come up with the final numbers. Donor agency funded projects have shorter timelines to showcase results to both the recipient government and to the government to which it reports to. So these agencies tend to stay away from randomised trials of micro-interventions. (I understand that the World Bank’s OED is now increasing its use of such trials but I haven’t come across a visibly increasing number of World Bank funded trials in India, surely a good place to begin?)

As for NGOs, apart from the prohibitive costs, does it really pay to conduct such a lengthy exercise all for the sake of some numbers? I would wager it does not as NGO funds are hardly dependent on any evaluation. In most cases, they are funded because of their track record of community work, relationship with community heads and local government officials and perceived integrity (many NGOs in India are fly-by-night operations).

For government agencies, the financial aspects are not important but the political implications of randomised trials are. While a case can be made that an evaluation that ‘proves’ the successful effect of an intervention can be used to garner political support for more of that intervention, what happens when an evaluation shows up a generously funded government intervention to have had no or very little effect on the indicators that it was trying to influence? I can safely say that key ministries in the government of India do not want to be put under that sort of scanner. (Could one imagine the Ministry of Health, one of the more notorious ministries in India and recently implicated by the World Bank for massive corruption in drug procurement, open its doors to randomised trials on a large scale?)

Next, take a look at Banerjee and Duflo’s Abdul Latif Jameel Poverty Action Lab (PAL) that has carried out, and is working on, several randomised trials in India. They rope in local NGOs to provide ‘buy-in’ with the local community and a team of Indian field coordinators, typically local boys and girls, to do the spade work of collecting the data. Though I don’t know how these projects are funded by PAL, I am quite sure that these NGOs (e.g. Pratham or Sewa) could not bear the full costs of such evaluations through a period of one year or more. In that case, the funds for the projects are coming out of research grants or from the funds of some usually US university or from corporate firms (or some combination of all three). So it is the researchers who are financially supporting the others to finish the research.

Also, PAL has a good working relationship with a think-tank in Chennai (Institute for Financial Management and Research) that is financially supported by ICICI Bank, one of India’s largest banks. ICICI’s interest is to gain insights into the country’s promising microfinance and rural credit market which it believes can be better understood by randomised evaluations. IFMR is now a place for regular workshops on randomised trials conducted by the PAL team and researchers from other US universities (e.g. Dean Karlan of Yale who also works on microfinance and credit products).

In short, randomised trials will not naturally be taken up by governments, NGOs or donor agencies working in developing countries just because it is ‘internally valid’ because of time, cost and political considerations. In that case, they will be driven by funding from corporate (towards business interests like the pharmaceutical industry) and research funds (towards the publications of young assistant professors) – as is the case with PAL and IFMR.

Best regards,

Dec 14, 2010

Inside the Boiler Room

Project Management has grown from a 'learning -by-doing' art to almost an academic discipline with a number of professional certifications. This shift reflects the importance of project managers in almost every sector in the economy and the increasing complexity and ambition of projects taken up by firms in a globalized world. Almost every investment that a firm makes today is into a project or more frequently into a programme (a logical portfolio of projects each contributing to an overall goal for the firm). It is no surprise then that the project management literature has ballooned in recent years in the form of books, manuals, toolkits, handbooks, videos, podcasts etc. This is in addition to the usual blogosphere and discussion groups on the Internet. So why another blog post on project management?

First, I want to share some of my experiences in the application of project management techniques to real world situations where projects will go wrong, especially if the project involves systems and actors whose motivations and capacities are questionable. Having gone through some of the project management literature doing the rounds these days, I fear that at least some of us would probably think of the project manager as someone with an ice cool temperament calmly issuing instructions and updating tools like risk registers. Nothing can be further from the realities of the projects where goals exist on paper but transform themselves into something else, where several clients on the same project with different expectations and motives have to be managed, where milestones are not achieved but payments come through, where milestones are achieved but payments do not come through and a host of other such situations that do not match the typical textbook description of what should be going on in a project.

My view is that the current literature on project management is not dynamic enough to handle real world complexities in large scale projects across geographies for large clients where there are multiple actors both on the client side and the project implementation agency side. In such cases, it is not enough for the project manager to record risks and update standard scope, time and cost schedules - she has to be tactically and strategically agile, revising targets downwards in some cases to increase scope on some other aspects in such a way so as to always keep ahead of client expectations and at the same time control them. Cost is not a holy grail either - the project manager must understand quickly when there is acceptable scope creep (there always is), how to compromise on certain cost escalations but gain added fee-paying opportunities from the client without bringing in changes to contract.

Second, project management is being affected as we speak by information technology that is challenging traditional concepts much highlighted in the literature. Loosely termed as "Project Management 2.0", this wave refers to a variety of collaborative IT tools and applications used by project managers to decentralize implementation, improvise strategies and share information much faster across and up and down multiple teams. With the rise of cloud computing systems, collaboration is going to be a fact of life for project managers at some time. This already puts top-down management models - with clean organisational pyramids on both the client and consultant sides - in danger.

Finally, I have a fair number of years of experience working and managing projects across sectors, clients, locations, countries, across teams of various nationalities, cultural and personal traits. I do not claim to be the grandmaster of project management with decades of experience but I believe I should be able to share something that would be interesting and valuable to the readers of this blog.

I will try to be as honest as possible in what I convey through this blog. I speak of clients not necessarily in a way that reflects the 'customer is always right' cliche. In fact, readers may find that my attitude towards clients tends to border on disrespectful. I accept this charge and will explain why I adopt such a position through the posts to come. Not all clients are knowledgeable, motivated to achieve the same goals that the project intends to achieve and willing to work with the project manager through thick and thin. On the flip side, not every project manager is entitled to a clean chit just because she has a certification and some years of experience. Project managers are often lazy, pretentious, incompetent and, worse, irresponsible - uncaring about what the real needs of the client are, the real goals of the project are and prone to treating every project as just another day in office. I highlight warning signals, traps and mistakes made on both sides to undermine one another in a project.

As a summary of my subsequent posts, I highlight some key facts and observations.


PROJECT CHAMPION

In government projects in developing countries, the project is usually driven by a 'big man' (Principal Secretary or equivalent in a British style bureaucracy and it's almost always men). Pro: much faster to drive through changes if you're a consultant without having to go through several useless meetings with officials who are ignorant/uninterested and with committees, standing committees, empowered committees, working groups, task force etc. Con: if the big man goes (transferred/retired/deputed/dies) then the project can quickly fall apart. The big man's successor almost always doesn't have the same motivation/interest in the project. One of the biggest causes of failure of eGovernance projects for instance is the frequent loss of project champions in developing country governments.

The 'big man' is rarely knowledgeable technically. If knowledgeable, the big man will expect consultant/project manager (PM) to absorb his or her biases/prejudices/preferences and incorporate it into scope. This is especially important to assess if the PM is coming into a downstream component of a project where other consultants/contractors have worked on upstream components or, in the case of IT projects, legacy systems that need to be integrated (difficult) or scrapped (easier). E.g. You, the current PM, may have replaced an earlier PM who was the favourite of the current 'big man'. (The replacement was done by the 'big man's' predecessor.)

Big man or not, in case of projects requiring 'hand-offs' of interim or final outputs across departments/ ministries, usual turf fighting will happen particularly between second tier and middle rank officials. One way of finding out which agencies are more powerful is to figure who gets the largest share of budgets, loans or programme grants. Smaller fish can be ignored more or less by PM. In such a situation, PM often has to report/coordinate across several 'clients'. As usual, there will be some who are for/against/non-committal towards the project. Some will be corrupt, most will be lazy - although to be fair, this may be the right option if you do not get any recognition or performance incentives for going out of routine work as is always the case in a bureaucracy).

SCOPE

Most books/manuals talk about the importance of a Project Charter or Scope Statement before work starts on a project. In practice, this is a luxury. Once tendering ends and the clock starts ticking, clients in government will wonder why you are wasting so much time creating yet another document on scope ("but the RFP already has your Terms of Reference, what is left to discuss?"). In many cases, the PM enters the scene to execute something that is part of a Project Charter created by another consultant earlier.

If pressed for time, quick solution would be to create a table based on the RFP which should have 3 columns - To be Done / Not to be Done / Undecided or Unknown. Regularly update this document and share with client and hope for clarity. Accept that there will be certain scope creep or late decisions as project progresses that will need improvisation.

The longer the project, the more the variation between actual scope and what was written on the RFP. The more the number of people with an opinion on client side, the more the variation between actual scope and terms of reference in RFP.

Saying 'No' to scope changes that you think are inappropriate/damaging/misinformed/stupid is rarely possible particularly if the client happens to be the biggest buyer of your services. This is very often the case with large scale government projects where the PM is contracted either individually or as part of a consulting team. In other words, if the PM and the organisation are in a seller-buyer situation, it's difficult to disagree with the client beyond a point. Of course, the dynamics differ when the PM represents a party/firm which has a relationship of equals with the parent organisation in the project, either in terms of investment or sharing of risk. Cultural variables specific to the project also matter e.g. it is difficult to manage scope changes in a setting where the government official enjoys and expects to be in the driving seat all the time and does not care much for a democratic process.

In the duration of a long project, some milestones will change/appear/disappear. PM has to accept this into planning.

In any discussion on scope, the PM should remember that the technically optimum solution is not necessarily the one preferred by the client. The client will pay more importance to politics (internal/external to organisation), to reducing his own work sometimes and to creating opportunities for him to move up the organization or (rarely) to monopolise a process to extract favours later on. It is important for PM to be pragmatic and not get into 'Analysis Paralysis' where she is trying to come up with a better analysis to refute a client's option or to push her own option. Effort is better spent on securing agreement on an admittedly inefficient option from key stakeholders, executing it and getting paid.

Even if scope creep is inevitable, it is useful to periodically take out a dusty copy of the original contract containing Terms of Reference if only to check for alarming or nonsensical deviations that are going to occur. This may also be useful if client-side stakeholders want a change that is fundamentally disrupting the scope. (Waving the original contract and pointing out the implications of such a big change in scope often deters government officers from pushing things. Government officials rarely want their own signatures next to a big change in a project document.)

COST

Cost is the element, sometimes the only element, of the scope-cost-time triangle that will be watched most closely by the client. This has its pros and cons. On the negative side, scope creep and demands from the client to deliver 'more' will not change the cost of services agreed to in the contract (it's a rare government client who will want to go through the paperwork and approvals necessary to initiate change in the cost clauses of an existing contract based on a competitive tender). For the PM, this obviously means that at the same cost (and same remuneration/revenue from the project) she would be expected to deliver more.

But if cost is such a holy cow, this can be used by the PM to control the other two points of the triangle. For instance, the most effective way to deter a client to propose a scope change is to show how this would require him to spend more on procurement. This strategy works very well when such decisions are taken by a committee. In particular, if the PM puts this down in the form of a written note to the committee, it is virtually guaranteed that the committee will back down from a scope expansion. This approach doesn't however work well on changes that affect the timeline. For long term government projects in developing economies, time is often not a very important variable anyway.

Cost from buy side = Revenue from sell side: the PM should focus on regular billing and collections from client especially in a long term project where Time and Material (T&M) billing comes into play. This is important apart from the obvious reasons. When collections stop, the PM's firm will tend to stop supporting his calls for more/better resources and infrastructure in a fire-fighting situation. From the firm's point of view, a project that doesn't earn money is not worth diverting resources to. In such cases, the PM is left alone to manage as best as he can. Regular collections enables the PM to command instant attention from higher-ups within his own firm. If the PM heads a large on-site team, word of any disruption in collections will spread quickly and sap the morale of the team.

On the other side, if the client gets used to a situation where the PM and her team keeps working without timely collections, it is an invitation to more scope creep and in general - trouble. If the client is regularly paying fees to the client, it also means attention is being paid to the project (not always certain in public sector/government projects) and is an indicator of the urgency to execute. One way to deal with this is to 'go slow' on pending work and keep mentioning the issue of overdue payments at every possible opportunity. This is no guarantee however that bills will be cleared. In large government projects, it is important for the PM to maintain good relationships with the official who actually signs the cheque. Doing favours such as arranging a chauffeured taxi for his son's trip to some other city for an examination may be most useful in certain siuations.

TIME

Time is often the least important variable in long term, complex government sector projects (exception: disaster relief or any project in the emergency category). The PM can use this to advantage by negotiating more time for any scope changes pushed by the client. In financial terms strictly, this would be inefficient, but it is advisable from two points of view. First, it gives her time to finish what is promised and sustain a good relationship and second, it creates more opportunities for the PM to create opportunities so that the client is 'locked-in' to her services for this or any other related project.

In any case, external variables (cabinet reshuffle, elections, budgets, sudden transfers) can all impact timelines and will be beyond the PM's control.

In short, given fixed costs, an increase in scope should be accompanied by an increase in time. If costs and time are fixed while scope increases, it means trouble for the PM.

After some time, clients tend to lose interest in project component level details. As long the PM can show minimum deviation from overall start/end dates, it is possible to 'hide away' small increases in time at various levels of activity so as to buy a fairly large chunk of time.



PROJECT MANAGER'S ROLE

Conventional PM schools of thought often lead to the impression that the PM should be immersed only in project steering. This assumes that there is a core project management staff supporting the PM which is directing several execution teams. In practice, this is frequently not the case - the PM also doubles as a strong member of the project execution team. This is particularly true of large scale government projects where the PM is one out of several members of an implementation team. What does this mean? The PM must be able to switch back and forth from executing a specific part of the deliverable (micro) to a bird's eye view (macro). This puts considerable pressure on the time available for pure play PM activities.

It is also the PM's job to integrate the deliverables produced by a multi-specialist team into a coherent whole that is understandable to the client. (Technically smart work that the client doesn't understand is not a deliverable.) This work is time consuming and requires skill and the PM must factor this into her work schedule. If the project has a number of interim deliverables, this will increase the workload of the PM to a point where often PM activities will have to be given a back seat and the focus is on meeting the deadlines. E.g. an integration of an As-Is assessment report written by multiple team members, each concentrating on one area, say, business requirements, infrastructure, network, data design, information security etc.

The demands on the PM's time means that hundreds of smartly designed MIS templates out there can't be used by a PM for lack of time and bandwidth. Most of these tools are well thought out but require diligent and accurate data updates by the PM to be of any use. It is important for the PM to use simple tools and techniques that pose minimum costs of keeping them up to date. So the PM should track a few key project dimensions using simple MIS and keep others in his mind or delegate someone else to track them. This is better than trying to formally map every possible aspect of a project into a tool/template.

PM 2.0 tools act as a 'force multiplier' for the PM in this regard. By using collaborative PM tools, it is possible to decentralise data collection and tracking away from the PM so that she has more time to steer and integrate deliverables.

There is one more aspect of PM that is usually overlooked by PM literature. This is one of internal HRM - the PM must also manage a large project execution team especially if it is on-site. E.g. sorting out workplace issues, distributing 'fly-back' days equitably to all team members, keeping track of effort, reimbursements, team logistics, troubleshooting, support services vendor management (vehicles, communications, accommodation) etc. This can easily become a full time job and is another big reason why the PM must ration the time available for project steering activities. The longer the project is, the more these tasks can eat into project steering time. (Tempers and morale of on-site team members usually start to fluctuate with long periods away from home.) Again, the PM is lucky if she is supported by a logistics manager on the team who looks after these aspects exclusively.

The 'perfectly staffed' project implementation team is a myth. The PM has to work with the resources made available to him by his firm or by the client. She will have to manage this by highlighting the stronger members and hiding the weaker members (who may or may not be replaceable by firm/client).

The best possible resources obtainable by a PM from her firm is at the beginning of a project. This should be factored into the PM's plans. After some time, the firm will loose interest, competing verticals within the firm will attempt to poach your best resources and on-site resources will start getting restless. A strong start with the best possible team often compensates for a time when the team is playing with bench players and work is not proceeding as quickly as it should.

A good way to quickly buy some time is to submit a proposal to a client-side committee. In government especially, this will cause the proposal to be shuffled back and forth between the committee members, each of whom will not want to be seen as the decision maker. This approach doesn't work so well in the private sector. On the other hand, if the PM wants to drive through a proposal quickly, then it is foolish to submit it to a committee. The PM should manoeuvre to ensure that the proposal is cleared by one person even before it reaches a shape and size requiring a committee meeting.

If the PM is writing a RFP for the client for further procurement necessary for project execution, following the textbook and maintaining a strict distance from bidders is not a good approach. Before the RFP is written, the PM almost always develops a Detailed Project Report (DPR) which provides a budget estimate and justification for that estimate (as well as a justification as to why procurement is necessary). Keeping in touch with bidders means that the PM is well informed about market costs and can provide reliable estimates. It is embarrassing for the PM to see that bids submitted far exceed or fall short of her estimate. In several cases, this leads to loss of credibility and work opportunities with that client. Keeping in touch also means that the PM is aware of what services the key players in the market can provide. This is handy while developing the scope of work for the RFP. At the end of the day the PM should develop a RFP that attracts a fair number of bids at prices that are close to the DPR estimate. In government especially, a cancelled tender is a source of irritation to everyone and the PM will not score any points with the client.

Finally, when things go haywire and the PM has very little control over a project that has gone horribly wrong, just focus on doing what is necessary to maintain billing and collections (or to minimize penalties) and do not ask too many questions.