Battling the Resource Curse:

Make Scarce Human Resources a Competitive Advantage

BY DREW MaRSHaLL CHIEF INNOVaTION OFFIcER aNd PaRTNER, KEpNER-TREGOE, INc.

Project managers find themselves constantly battling the resource cursea scarcity of resources within an abundance of projects. And while all resources seem to be in short supply, people are the resource most in demand

Battling the Resource Curse: Make Scarce Human Resources a Competitive Advantage
The resource curse is not likely to disappear in todays lean environment, but scarcity can be used to advantage. Scarcity presents an opportunity for focus, diversied resource utilization, and recognition that project resources can and should be employed more effectively across projects, programs, and the entire organization. This positive perspective on scarcity is actually supported by a remarkable feature of modern economic growth. It has been found that economies with abundant natural resources have tended to grow less rapidly than natural resource-scarce economies. Economies, with an initially high ratio of natural resource which exports to gross domestic product, tend to have low growth rates during subsequent years. This negative relationship has held true even after controlling other factors that are important for economic growth, such as initial per capita income, trade policy, government efciency, investment rates, and other factors.1 The most abundant countries had lagging growth compared to those with scarcer natural resources. How could this be? The answer lies not in the exploitation of natural resources in a standardized fashion but in linking and leveraging natural resources in diversied, new ways that foster growth. For project managers, an abundance of resources is always elusive. The demands of an organizations desire for projects continually outstrip the capacity for delivering projects in a timely, scally sound, and quality manner. How a project manager uses the available resources, leverages those resources, and rapidly ramps up incoming resources is essential to breaking the resource curse.

Successful project staffing in a resource-scarce environment is tied to five key elements.

1. Assure that there is clear initial ownership for project work packages. In assuring that there is initial ownership for project work packages, the project manager is essentially putting a stake in the ground around which to coordinate agreements. For the project manager, negotiating project commitments begins after work has been organized into manageable, actionable work packages. With the work dened, the project manager can begin the process of identifying resources. Responsibility assignment often takes place in several passes or rounds of negotiation. The rst pass is called the initial work negotiation. Each work package has specic resource requirements. Guiding questions: Who has the resources for this element? Who has necessary knowledge or information? The rst pass might focus on the most desirable project team members. This leads to a process of winnowing the desired resources in order to identify and assign the people who will be available. Based on anticipated availability, negotiation begins with both the individual resources and their respective managers. At this step, as with each of the following steps, the commitments to the project should be made visible to all. Making thinking visible is essential in combating the resource curse. Commitments that are documented and visible are more readily managed.

Battling the Resource Curse: Make Scarce Human Resources a Competitive Advantage
2. Obtain initial commitments to the project in terms of clearly understood expectationsrst from resource providers/managers, and second from the resources themselves. Project managers need an understanding of the current project load across the enterprise and any anticipated changes to the operating project portfolio. Project managers can then seek resource commitments. This process should begin with the managers of the potential project participants because the managers are responsible for the functional workload balance. With the managers initial buy-in (again with visible commitment), the project manager can work with the potential project participant to design and schedule a realistic work package. A project manager may need to alter the project plan to accommodate a resource managers resource constraints or look elsewhere for resources. Project managers can avoid future problems by involving resource managers and appreciating their constraints and objectives. The work package includes a description of the tasks or actions required to produce the work package. The project manager negotiates these tasks with the project participants and their managers until all commitments are made and documented 3. Identify resource commitments that are consecutive or adjacent. With the initial negotiated commitments in hand, the project manager can begin to map adjacent and consecutive commitments. The purpose of this exercise is to identify potential problems within the roster of commitments so that alternative resources can be identied and negotiated with resource managers. Not all resources are of equal signicance. Project managers need to identify project participants, who could jeopardize the project if other commitments pull them from the project, and work packages on the critical path and then negotiate back-up resources. Guiding questions: Whose commitment do we need for this element? What are they responsible for doing? Who is the most appropriate alternative resource? (Consider this the Miss America principle someone should always be in waiting!) Capture the resources-in-waiting visibly. List the name of each individual (or group) who will contribute to a terminal element (e.g., John, data entry; Lauren, review and approve). 4. Review, reconrm, and re-negotiate. Review the project denition documents and initial work negotiation commitments with each resource provider/manager to reconrm the commitment of each individuals time; conrm the identity of the possible substitutes; and re-negotiate the resource commitments with individual resource managers. Identify one (and only one) person with primary responsibility for each work package. Any others with responsibilities become secondary. This should be identied clearly. For example, in the chart below, it is indicated with a P. Negotiate a commitment for each individual directly with that individual, and the resource provider or manager.

Battling the Resource Curse: Make Scarce Human Resources a Competitive Advantage
Guiding questions How are resources allocated to support the project schedule? Are resources committed to support the project? Responsibility assignments can be documented clearly using a Responsibility Assignment Matrix (RAM). The RAM shows Work Breakdown Structure (WBS) work packages (or tasks) down the left margin and the names of individuals or departments across the top. Each cell contains a brief description of the work to be done by the individual or group. Primary responsibility should be noted in one cell for each work package in the WBS.

Engineer Maxine
WBS 1.1 WBS 1.2 WBS 2.1 P Design Site Assessment Review Provides Design & Site Assessment

Technician - Jan
Design Audit P Site Assessed P - Budget Developed

Finance
Cost Estimation

5. Make the resource commitments visible to all concerned. The project manager can use the RAM and other tools to make responsibilities and commitments visible to the project team and stakeholders. This added clarity helps the project manager conrm and maintain project commitments. As project requirements or schedule changes occur, the RAM supports any necessary re-negotiation of resource commitments.

About the Author

Andrew C. Marshall (Drew) is a partner and the chief innovation ofcer with Kepner-Tregoe, Inc. In this role, he ensures that the products and services that KT delivers to clients are directly meeting their needs and producing measurable and meaningful results. In this role, he also chairs the Technical Leadership Committee which has responsibility for the successful implementation of KTs product development strategy, positioning the rm for long-term growth. Kepner-Tregoe, Inc. has earned a worldwide reputation for improving business results through people. A global leader in effecting successful change and improvement, KT helps clients achieve lasting results through a proven approach of process, facilitation, and transfer. Focusing on the needs of the organizations peopletheir skills, capabilities, and performance environmentKT continues to nd innovative ways to integrate human resources into an organizations strategy, structure, and systems, and the processes in which goals are accomplished.

Other tools can help resource managers schedule their resources and make them visible. Calendars for each resource are helpful when many resources are scheduled over long lead times. Histograms and software tools help level resource use within a project. Loading diagrams show percentage of capacity over time for an individual resource. They can help avoid crunches and over use when project team members are working in several projects.

The Bottom-line
The best way to avoid the project resource curse is to acknowledge that resources are always in jeopardy and are prone to change. The ability of project managers to plan defensively and proactively can make or break project success. To work successfully in a resource-scarce environment, project plans must address critical disruptions and manage commitments visibly. Public commitments are not only harder to break, but they are easier to maintain. Top of mind often means highest commitment.

Jeffrey D. Sachs and Andrew M. Warner, Natural Resource Abundance and Economic Growth, National Bureau of Economic Research, Inc series NBER Working Papers # 5398.
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