The Project Manager’s Bookshelf: Business Acumen

PMI Talent TriangleI began this series with a few books that I recommend for developing people skills, then followed up with a list of books on technical skills. This week focuses on developing business acumen, closing with books on procurement and basic business law.

Project management is a business function, even if you’re managing software development or moving your internally hosted enterprise applications to the cloud. Business acumen is a bit like Justice Potter Stewart’s comment on pornography—hard to define, but you know it when you see it. There are a few foundational knowledge areas that support development of acumen, and I’ve covered some of them here. But you also need to read business news—I like The Economist for general content on the business environment, but also find a source that focuses on your industry. Read your company’s financial reports and communications to investors, as well as Mary Meeker’s Internet Trends Report. And ask your boss’s boss what she reads.

Finance and Accounting

If you have an undergraduate or graduate business education, you can safely skip this section. For everyone else, this is a vocabulary and an understanding of processes that you need to acquire, even if you don’t completely master it.

Accounting: A Beginner’s Guide to Understanding Financial & Managerial Accounting by John Kent. If you’ve never taken any accounting course, at least get familiar with the vocabulary of financial and management accounting. This is a very basic intro.

Financial Statements: A step-by-Step Guide to Understanding and Creating Financial Reports Third Edition by Thomas Ittelson. You need to be able to understand and ask questions about your company’s finances. This book will introduce you to the income statement, cash flow statement, and balance sheet.

Discounted Cash Flow Modeling for Project Financing: A Step-by-Step Instruction by Monique Young.  Good coverage of a moderately complex topic, although the author needs to be introduced to a good editor. Focus is how to implement a model in Excel. Less than $5.00 in Kindle version.

Strategy and Competition

Project managers are given the responsibility for implementing business strategy. Not every project is strategic, but if you aspire to manage those high-visibility, career-making strategic projects, you need to understand the nature of competition and how business strategy is developed to compete in complex markets.

Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Explains the three generic strategies—lowest cost, differentiation, and focus—and shows how competitive advantage links to profitability.

Business Strategy: A Guide to Effective Decision-making by Jeremy Kourdi. This is a bit basic, but it’s well-written, as you’d expect from The Economist. From understanding what strategy is to how strategies are developed, to implementation—where project managers come into the picture. Lots of brief examples, not detailed enough to be called case studies, but still illustrative.

Marketing

Every organization delivers products or services, and most deliver both. The means and channels of marketing has evolved dramatically in the last two decades, and a large part of business acumen is understanding how the relationship between the organization and it’s customers is initiated, developed, and maintained.

Customer Centricity, Second Edition by Peter Fader. The customer is not always right, although the right customer is always right. Fader gave us permission to focus on the customers whose business is profitable for us and send the rest somewhere else. Lots of examples, success stories, and a few horror stories.

Social Media Marketing Mastery 2020: 3 Books in 1 by Robert Miller. These three books cover branding and how to be an influencer through Facebook, Twitter, and YouTube, and how to “Win followers and influence millions” using Instagram. Welcome to the third decade of the 21st century.

Procurement and Business Law

I am not an attorney. But from years of experience in procurement and contract negotiation, I’ve come to appreciate the value of a basic understanding of business law in formulating good questions that attorneys can answer.

How to Write an RFP and Manage an RFP Project by E.B. Diamond. A guide to preparing a request for proposal and managing the competitive bidding process. Note that this presents a commercial point of view; government agencies will have a detailed and usually rigorous process for procuring goods and services. As much about project management as it is about preparing RFP’s.

Business Law by Robert W. Emerson. Part of the Barron’s Business Review series, this covers US law. If you’ve never taken any kind of business law course, this is a decent self-study text. That said, at 974 pages, it isn’t an easy read. The first three chapters introduce a lot of history and vocabulary. Definitely read chapters 4, 5, and 8 on contracts, and after that, you should skip around to the topics that matter to you.

In Closing

I’ve suggested books on a wide range of topics in this series. While I don’t expect anyone to read all of them, I hope this series has led you to think about how these knowledge areas fit into your personal development plan.

The Project Manager’s Bookshelf: People Skills

I used to see a lot of project management thought leaders write about what they called soft skills. They meant things like Emotional Intelligence, communication, driving change, fostering collaboration, and so on. At some point, they realized that those things are hard. I prefer the term people skills, which isn’t specific enough for some, but it facilitates grouping knowledge and skills into three broad areas:

  • People skills
  • Technical skills
  • Business acumen

A lot has been written about these topics, and a lot of recommendations have been made in the SEO-oriented format of Top Ten Books on XXX to Read Before You Get Out of Bed. This is the first of a series of posts that will recommend a few books that you might not have seen on more click-worthy lists.

Communication

Developing Yourself and Others

Collaboration and Culture

Next week, I’ll make some reading recommendations for developing your technical skills. No, I’m not suggesting you become a programmer. More like the classes you wish you had signed up for when you were still trying to decide on your major.

 

 

 

Simplicity: What’s Left When You Hide Everything Else

Have you ever stopped at the supermarket to reflect on the constantly improving state of the art in maximizing grain yield per acre? Of course not. You simply grab a loaf of bread, glance at the “Sell by” date, and put it in your cart. You don’t feel a sense of gratitude that you and your family probably won’t die of starvation, as was so common for earlier generations. You don’t feel a sense of wonder that so little labor is now required to feed seven billion people. And you certainly don’t notice that, adjusted for inflation, you pay less for that loaf of bread than your grandparents did. You just move on to the next section, which was carefully organized to make it easier for you to find everything without assistance from the staff. You benefit from that simplicity because others handled the complexity. And that is a large part of a project manager’s job: to enable simplicity by allowing others to ignore the underlying complexity that makes it all possible.

Simplicity Is Expensive

If you want simplicity, you have to be prepared for a lot of capital expenditure. Whether it’s a manager’s dashboard or microwave popcorn, someone had to expend a lot of money on experimentation, development, productization, and rollout. Good project sponsors understand that; the rest need to have it pointed out to them. Simplicity costs more than complexity in almost every case, although the incremental cost may be spread across a larger market. If you have a fixed market, like “the managers in my company,” then cost per manager will increase. That said, a solution that isn’t used is a complete waste of resources, so good project managers are advocates for optimizing allocation of resources to get the expected (or at least desired) benefits.

Simplicity is the New Baseline

Twenty years ago, you could download files containing a movie. It took a long time, you’d need special software to view it, it would eat up a large share of your hard drive capacity, and technically speaking, it was illegal. But a funny thing happened when business people noticed that they couldn’t make a dent in piracy with public service announcements or occasional prosecutions: they changed their business model. So now, anyone who wants to can stream videos on demand, for anything from cheap to free. From the consumer’s perspective, it’s simple; the problem has become about what to watch, rather than how. But when playback pauses due to connectivity issues, the consumer gets upset. They expect reliability, not just simplicity. The cautionary lesson is simple: good project managers work to temper the pursuit of faster-better-cheaper with constraints of scalable-sustainable-supportable.

Simplicity Redistributes Risk

One of the common side-effects of simplicity is a change in the risk profile. GMOs have helped reduce crop yield uncertainty (although not necessarily increased yield) but there is concern among consumers that their health might be impacted. Self-driving cars are represented as safer, eventually reducing the number of accidents, but not all accidents are preventable by software. Good project managers ensure that sponsors and other decision makers understand the real and perceived implications of their actions when shifting risks.

As we continue to reduce the degree of engagement and commitment required of the end users of our products, it is necessary to continuously reassess the business model that delivers it. The project manager is increasingly expected to be an active participant in that reassessment, and the wise project manager will embrace that expectation. The days of the project manager as administrator and status reporter are in the past. Going forward, we will succeed only to the degree that we adopt the more expanded vision of an executive.