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Monday, July 11, 2011

Project Planning Is a Must

People plan for events in a variety of ways.  Some will spend hours planning a vacation while others will do spur-of-the-moment scheduling.  It all depends on the individual.  This is fine for many personal activities, but is not a good idea for a company.  Planning is essential to good and timely execution that allows for maximal value creation. 

Think for a moment about developing a widget that is to be launched in your market in 3 years.  In order to get it ready, further research & development is needed.  A manufacturer must be identified.  The manufacturer will need time to develop the scale up path and equipment.  Maybe you need to test the product before scale up manufacturing.  The sales and marketing team should become involved at some point.  The sequence of all the events leading to a launch is what requires planning and monitoring to ensure a timely product launch. 

The steps leading to a successful product launch vary depending on the type of product.  Some of the steps must be done in a serial or sequential manner.  Others can be in a parallel with others.  The overlap of these and sequences of the steps to market along with timelines and budget are what make up your project plan.  Your ability to lay out this sequence and shave time and costs off the program is essential.  In addition, optimal timings are important for capturing sales before the patents run out.

There are several software programs that allow for project planning. One can even use a spreadsheet or simple word file.  But the key, is identifying all steps, times required for each step, defining how they fit in a sequence, the budgets for each part, and integrating them into something that is easy for the team to follow.  Then get the team to buy off on the timings and the budgets.  Having the team agree with the plan will ensure they manage their activity properly and work to achieve the defined timings.  They will be more likely to alert you when issues that affect timings arise; especially if it is something that keeps them from meeting their schedule.

A good way to initiate the discussion and planning it by getting your team together and having everyone identify all of the steps to get to market.  Try to identify what can only be done in a serial manner and what steps can go on simultaneous with others. Laying these over a time course and fine tuning the sequence of events will come next.  Review the budget for each and determine if this meets your expectations.  If you have clear timing issues or budget issues, it is a good time to lay those constraints on the table before your team starts the planning!

The process becomes more important when the startup is a virtual or semi-virtual company with limited fixed staff.  The core team must have the background and skills to manage the processes.  They should be able to review what is provided from external vendors and determine whether the timelines and budgets are accurate or not. They will be important to integrating the steps and holding the vendors to the standards you require.

Whether the team is in-house or contract services, constant vigilance is a must to maintain the timings and budget.  The managers of each segment must be in constant contact with those performing the different functions.  Sometimes, pressure is needed to keep the process on a ridged schedule or budget.  Failing to maintain timelines and budgets can result in major cost overruns and loss of sales during a patent life.  For example, suppose a product has a sales potential of $120MM per year.  This translates to $333 K per day in lost sales.  Add budget over runs and the loss is even greater. 

Summary:  Manage your project timelines and budgets to maximize returns.

Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon