Tag Archives: Schedule

How Do You Negotiate Milestone Contracts? Three Suggestions

Situation:  A company’s contracts are based on milestones versus time and materials. This is common for their industry.  However, end products are poorly defined at project outset and product requirements frequently evolve and change, making milestones squishy. How do you negotiate milestone contracts and payment schedules?

Advice from the CEOs:

  • In addition to payment schedule, there are four elements to a project negotiation – specifications, schedule, project flow, and budget. Tell the client that to hit their budget target, they need to give you control of any two of the other three factors. This means that if they want to specify budget and schedule, then they have to yield you control of the specs and project flow. Any change to these means that they have to be willing to change budget and/or delivery date. Finally, to keep the project going on a timely basis, they must make milestone payments on time and on schedule.
  • Try to transform the project, as much as possible, to time and materials. Here’s your talk line:
    • To give you 100 hours of effort on a fixed bid basis, we have to budget 110. Time and materials, in the long run is less expensive because you only pay for what we need to deliver your product.
    • Your credibility to deliver on a time and materials basis will be based on past performance and the relationships that you have developed with your clients.
  • Milestone contracts are especially difficult in low margin industries because of project variability. One solution is to bid 130 hours cost for 100 hours work. The challenge is that this looks uncompetitive, especially compared with offshore resources. Therefore, an option is to develop offshore capability so that you can deliver your projects using a variety of resources with variable costs. Price everything based on domestic prices, but use offshore resources to improve your margins and your ability to cover project overruns without killing your profits.

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How Do You Make Time for Initiatives? Four Approaches

Situation: A company is enjoying a good year and is busy both adding new business and serving current clients. However, the CEO finds that when business is good he doesn’t have time to focus on all of his initiatives. This frustrates him. How do you make time for initiatives?

Advice from the CEOs:

  • How extensive is your To-Do List? If you have two or three major, time consuming initiatives, and a host of small tasks, prioritize both categories. Focus on what you can do given the time you have available. Put lower priority on the smaller tasks, and delegate as much as you can, or put them off until things slow down. This will help deal with your frustrations.
  • Block out time for yourself.
    • Do this early in the day, before you have lots of distractions on your desk.
    • Allocate 1-2 hours early in the morning, and get to work a little later. Let you staff know that you are not to be disturbed unless it’s an emergency, but that they will have your full attention when you get to the office.
  • Plan you initiatives, segment them into smaller pieces, and schedule them.
    • Use Mindmapping to segment them, or a piece of software like MindManager to assist your thinking.
    • Among the segmented pieces, look for opportunities to delegate to free up your time and involve staff in the initiative.
  • Develop a Task List in Feature/Deliverables terms with a broad timeframe.
    • Prioritize and build into your Quarterly and Annual plans.
    • Again, look for opportunities to delegate.

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How Do You Fit In Time For Yourself? Three Suggestions

Situation: The CEO of a high tech company has been working long hours, and has had no time for himself, or even for much sleep during the past few months. As is typical in a small company, the CEO and everyone else wears many hats. What have you done to successfully fit in time for yourself?

Advice from the CEOs:

  • Take a calendar, and mark all of your time for several weeks to a month. Then look at the ways that you spend time and prioritize them into categories:
    • Life – eating, sleeping, etc.
    • Must do – mission critical
    • Must do – could possibly delegate
    • Free Time
    • See how many of the “Must do” activities you can delegate or otherwise handle and recategorize this time into Life or Free Time. You may be amazed at how much more efficiently you can use your time. Ask all employees to do this every 90 days to assure that they are utilizing their work time effectively.
  • If you have long commutes or lots of travel time, get an extended battery for your laptop. This will allow you to make travel time more productive.
  • Or, if you have a long commute, hire a semi-retired driver to drive you to and from work. Turn your commute time into productive work time.
    • Semi-retired drivers are available for as little as $10 per hour. You can pay them $1,000 at a time in advance, and the driver keeps a log of the time spent driving the client.
    • Use your car, or the driver’s car and if the latter, reimburse the driver for mileage.
    • To make this work effectively set the rule that you are the client, and not looking for conversation. You want to accomplish as much work as possible during the trip.
    • Look for professional drivers, with the proper licensing. Do an MVR check on the driver’s history as part of your evaluation process.

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How Do You Maintain Focus on Top Initiatives? Five Methods

Situation: A company is enjoying a good year both adding new business and serving current clients. When business is good the CEO finds it difficult to focus on all of his initiatives. This is frustrating. How do you maintain focus on your top initiatives when it gets really busy?

Advice from the CEOs:

  • When times are good, many new opportunities arise. If you have too many initiatives, you lose focus and have difficulty achieving them. Limit your initiatives to 2-3 at a time, focus on them, get them done and done right. Then pick your next 2-3 most important initiatives.
  • Schedule time for your initiatives on your calendar. Honor this time commitment just as you would an important customer appointment.
  • You might try a daily prioritized list of 4-5 small things and one big thing and focus on these for the day. Keep track of other priorities on a separate To-Do List.
  • Hire an assistant to whom you can delegate the small things – including the background research on your big initiatives. This gives you more time to focus on the big things, and the important decisions within the bigger projects.
  • Create a planning calendar for your initiatives. Assess each initiative for level of effort required, determine specific deliverables, and the amount of time that it will take to complete the initiative. Next, prioritize the list and take on a small number at any one time. This will help you both to complete the initiatives that you start, and to complete more of them in a given time period.

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Are Negative Incentives Effective? Four Perspectives

Situation: A company has been struggling to meet objectives. Financials aren’t completed on schedule, limiting the ability of the CEO to manage by the numbers. Milestones are behind schedule. The CEO was advised to consider stringent measures, including financial penalties, to force compliance to performance goals. In your experience, are negative incentives effective?

Advice from the CEOs:

  • There are at least three potential roots of this problem. Have your hired people who lack the skills to perform their functions? Is there a clear plan and set of priorities in place? Or are you as the CEO being consistent in your demands of the team? You need all three to meet your objectives.
  • Be sure to set SMART objectives: specific, measurable, achievable, realistic and time-bound. In addition, make sure that everyone understands how their performance impacts not only the plans of the company, but their salary and benefits as an employee. Be sure that everyone has the resources to complete what is expected of them.
  • Be careful if you are considering financial penalties, and negative incentives.
    • Many studies have shown that positive reinforcement is more effective than negative reinforcement.
    • If an employee is chronically behind on deliverables, ask what is happening and why they are not getting the job done.
    • If the response is not satisfactory, and performance doesn’t improve, you are better off terminating the employee than using negative incentives.
  • Often the question is not one of motivation but one of focus. Focus has to start at the top, and has to be maintained through departmental and team leadership. Make sure that there is proper training in setting and monitoring achievement of objectives throughout your leadership team. It helps if everyone clearly understands what the company is trying to achieve.

Key Words: Objectives, Achievement, Failure, Schedule, Manage, Numbers, Penalties, Compliance, Positive, Negative, Incentive, SMART, Resources, Achievable, Motivation, Focus, Training, Great Game of Business, Jack Stack, Understand

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