solution

The ill-fated Makana project was in trouble right from inception. Graham who had been an assistant project manager was involved in the project from conception. When the Makana project was accepted by the company Graham was assigned as the project manager. The program schedules started to slip from day one and expenditures were excessive. Graham found that the functional managers were charging direct labour time to his project but working on their own “pet” projects. When Graham complained about this he was told not to meddle in the functional manager’s allocation of resources and budgeted expenditures. After approximately 6 months Graham was requested to provide a progress report directly to corporate and division staff.

Graham took this opportunity to bare his soul. The report substantiated that the project was forecasted to be on year behind schedule. Graham’s staff as supplied by the line managers was inadequate to stay at the required pace, let alone make up any time that had already been lost. The estimated cost at completion at this interval showed a cost overrun of at least 20 percent. This was Graham’s first opportunity to tell his story to people who were in a position to correct the situation. The result of Graham’s frank candid evaluation of the Makana project was very predictable. Non-believers saw the light, and the line managers realized that they had a role to play in the completion of the project. Most of the problems were now out in the open and could be corrected by providing adequate staff and resources. Corporate staff ordered immediate remedial action and staff support to provide Graham a chance to bail out this program.

The results were not all what Graham expected. He no longer reported to the project office, he now reported directly to the operations manager.Corporate’s interest in the project became very intense requiring a 7am meeting every Monday morning for complete review of the project status and plans for the recovery. Graham found himself spending more time preparing paperwork, reports, and projections for his Monday morning meetings than he did managing the Makana project. The main concern of corporate was to get the project back on schedule. Graham spent many hours preparing the recovery plan and establishing manpower requirements to bring the program back onto the original schedule.

Group staff, in order to closely track the progress of the Makana projects assigned an assistant program manager who determined that a sure cure for the Makana project would be to computerize the various problems and track the progress through a very complex computer program. Corporate provided Graham with 12 additional staff members to work on the computer program. In the meantime nothing changed. The functional managers did not provide adequate staff for recovery assuming that the additional manpower Graham received from corporate would accomplish that task.

After approximately R50 million was spent on the computer program to track the problems it was found that the program objectives could not be handled by the computer. Graham discussed this problem with the computer suppler and found that R15 million more was required for programming and additional storage capacity. It would take two months for installation for the additional storage capacity and completion of the programming. At this point the decision was made to abandon the computer program. Graham was now a year and a half into the program with no prototype units completed. The program was still nine months behind schedule with the overrun projected at 40 percent of budget. The customer had been receiving their reports on a timely basis and was well aware of the fact that the Makana project was behind schedule.

Graham spent a lot of time with the customer explaining the problems and recovery plan. Another problem that Graham had to contend with was that the vendors who were supplying components for the project were also running behind schedule. One Sunday morning while Graham was in his office putting together a report for the client a corporate vice president came into his office. “Graham he said, in any project I look at the top sheet of paper and the man whose name appears at the top of the sheet is the one I hold responsible. For this project your name appears on the top of the sheet. If you cannot bail this thing out, you are in serious trouble in this corporation.” Graham did not know which way to turn or what to say. He had no control over the functional managers who were creating the problems, but he was the person who was being held responsible.

After another 3 months the customer becoming impatient realized that the Makana project was in serious trouble and requested that the division general manager and his entire staff visit the customer’s plan to give a progress and “get well” report within a week. The division general manager called Graham into his office and said, “Graham go and visit our customer, take three or four functional line people with you and try to placate him with whatever you feel is necessary”. Graham and four functional line people visited the customer and gave a four-anda-half-hour presentation defining the problems and the progress to that point. The customer was very polite and even commented that it was an excellent presentation, but the content was totally unacceptable. The program was still six to eight months late, and the customer demanded progress reports on a weekly basis. The customer decided to assign a representative in Graham’s department to be on site at the project on a daily basis and to interface with Graham and his staff as required. After this turn of events the program became very hectic.

The customer representative demanded constant updates and problem identification and then became involved in attempting to solve these problems. This involvement created many changes in the program and the product in order to eliminate some of the problems. Graham had trouble with the customer and did not agree with the changes in the program. He expressed his disagreement vocally when in many cases the customer felt the changes were at no cost. This caused a deterioration in the relationship between client and producer.

One morning Graham was called into the division general manager’s office and introduced to Calata. Graham was told to turn over the reins of the Makana project to Calata immediately. “Graham you will be temporarily be re-assigned to some other division within the corporation. I suggest you start looking outside the company for another job”. Graham looked at Calata and asked, “Who did this, who shot me down?”.

Calata was program manager on the Makana project for approximately six months after which by mutual agreement he was replaced by a third program manager. The customer reassigned his local program manager to another project. With the new team the Makana project was finally completed one year behind schedule and at a 40 percent cost overrun.

Questions 1.

Does the organization structure appear to create an environment conducive to successful project delivery, and did senior management appear to be supportive and committed to the success of this project? Justify your answer