Few people have heard of the Italian Economics Professor Vilfreto Pareto. He is better known for the 80/20 rule he specified in the early 1900s. He determined that 20% of his garden’s pea pods were responsible for 80% of the grown peas. He later found the same principle, 80/20, was meaningful to macro-economic concepts. Pareto discovered his rule applied to other measurements besides pea pods and econometrics. My business career was over four decades. 70% of which were as the CEO of software companies. From my observations from numerous significant corporations, I thought the Pareto rule should be at least 90/10 when applied to the ratio of work accomplished by an organization’s high performers versus the remainder of the staff. As the CEO of my three software companies for over 35 years of my business career, my customers included a significant percentage of the major US aerospace companies. Our clients included Allied Bendix, Arma, Boeing Aerospace, Coopers & Lybrand, Fairchild, Garrett AirResearch, General Dynamics, Honeywell, Hughes, Intel, Litton, Lockheed, Martin Marietta, Motorola, NASA, National Cash Register, National Semi-Conductor, Norden, Northrop, Raytheon, Rockwell, Singer, Teledyne Ryan, Teledyne Systems, Teradyne, Texas Instruments, TRW, United Technologies, US Air Force, US Navy, etc. We also did business with organizations in Europe, Israel, Japan, and the Netherlands. I frequently observed, met, consulted, and negotiated with their management and software engineers. I leaned towards 15% of an organization’s staff is responsible for 85% of its production. Is your experience different? In your personal and organization’s work, what other measurements do you feel the Pareto’s rule applies in your life?

 

 

My partners, associates, staff, and I analyzed why projects were continually failing. We interviewed over a hundred Project Managers, fifty Project Portfolio Managers, and fifty C-Level Executives. We asked questions such as; the principal reasons your projects do not fully satisfy the triple constraint of time, costs, and scope? The five significant areas causing this lack of success were resource allocation, performance, requirements, task scheduling, and communication.

 

The impetus for creating the Optimize product was Pareto’s 80/20 rule. We pondered why most of an organization’s staff allowed a small percentage to accomplish the most significant results? We were perplexed at why so many projects did not deliver their promised schedule dates, functionality, and costs? Our staff asked and discussed these questions at length, wondering why so many employees rarely worked 80% of their forty-hour workweek. Our combined empirical median score for hours worked for an average forty-hour worker was less than twenty-eight hours. 70% of the hours were productive, organizational work, and 30% towards non-organizational activities (discussing politics, sports, fashions, movies, books, plays, news, hot guy/girl down the hall, children, personal issues, gossip, etc.).

 

Although not Pareto’s 80/20 rule, we were close. We asked was it because some people were more focused than others? Or were some more talented even though they belonged to the same labor category with roughly the same years of experience? Or was it that some were just lazy? We discovered that over 95% were interested in making more money. So why the Pareto rule, or in our discovery, the 70/30 rule. We determined that over 80% of those interviewed believed there was no direct correlation between their productivity and their current remuneration. Employees asked themselves, “why should I work harder, focus more, and improve my skills when my compensation did not directly reflect my productivity?”

 

Don’t all managers recommend salary adjustments for the most productive ones? Not really! Well, you say, don’t as you ascend the management ladder, managers who review their direct reports analyze the salary adjustments? Not really! Numerous factors determine salary adjustments (favoritism, social grace, self-promotion, relations, etc.) since productivity is not a measured factor for performance for nearly all organizational positions. A differentiator industry is sports. Like baseball, basketball, football, and soccer, the players with the best statistics are nearly always the highest paid in team sports. The baseball batters with the best batting average, on-base percentage, home runs, fielding average, and clutch performances are almost always the most highly compensated.

 

 

In basketball, the highest-paid individual scores the most points, has the most rebounds, blocks the most shots, plays the best defense, has the most assists, etc. In football, the individual who performs statistically the best in their positions is the highest-paid. There are few measurements informing management and the individuals about their performance for the different labor categories outside of sports. Almost always, the individual’s management superior’s intuitive feelings determine compensation. Shouldn’t how valuable a staff member is to the organization for their respective labor categories determine their compensation? What do you believe? Does management know this? We believe they do as well as an organization’s staff. Is this a detriment to performing at your best for your organization? Man has conducted projects since inhabiting Earth. Three methodologies have evolved:

  • Just Do It (from the initial project) è Since humans lived on Earth, they have thought about what they could do to improve the status quo of the tools and processes they were using. They launched projects (think Pyramids) to create new tools and processes. Individuals and groups figured there had to be better ways to do what they were doing or seeing. They wanted to build a better widget and create a superior method than they envisioned? They figured if they had enough workers, bright minds, managers, time, and funds, their staff could build what they desired. They described what they wanted and how they could produce it for their benefactors. They assembled a project team and, with the support of the stakeholders, determined how to build the product. They found they could create wonders given enough time and resources to accomplish their mission. Even today, when doing a small project (think less than $200,000), students and adults use the “Just Do It” methodology. They either jotted notes on paper about the tasks needed to accomplish their goal or used a product like Microsoft’s Excel or Word.
  • Waterfall (from the early 1940s) è The Waterfall methodology emerged from the Second World War. Waterfall established a logical order to the different phases of a project. Think Hoover Dam, harnessing an atom’s energy, BART, L1011, F-16 Fighter Plane. Waterfall divided projects into logical phases, such as Initiation, Analysis, Design, Implementation, Verification, and Deployment. Far superior to “Just Do It,” Waterfall was far from perfect. It included formal documentation and reviews at the start and end of phases.
  • Agile (from the early 2000s) è The “Agile” methodology uses small, synergistic teams to break projects into small functional units to be implemented in priority order. A combination of the client, end-users, and team determined the implementation order. In the Agile world, visible, verified, approved results are more important than the formal documentation you find in the equivalent Waterfall implementations. The verification and reviews occurred after each functional unit was completed, tested and demonstrated to the end-user’s (client’s) or key stakeholder’s satisfaction. Advocates claimed Agile (1) minimizes the cost, (2) improves the quality, and (3) minimizes the time taken achieving the project’s mission. Its rapid partial development and deployment of workable, functional units with the customer and end-user involvement are the keys to its success. Agile has improved project performance over Waterfall, but not as great as the “Agile Advocates” claim. Agile projects often fail to satisfy the triple constraint. 

In all three methodologies, erudite project managers realized it made sense to divide a project into tasks. These same project managers eventually found that it was not easy to estimate the task duration when a task took longer than a week. Project managers often found that one task’s start date depended on another task’s completion date (the simplest form of dependency). Dependencies mean task B cannot start until the completion of task A. Most scheduling tools allowed the specification of fixed dates in schedules. They realized there should be few fixed dates in a schedule, like a project’s start date and when a customer is visiting from an Asian country to a city in America. The reason is that tasks using dependencies self-adjust when a predecessor task takes less or more time. The project management tool adjusts the start and finish dates. For example, if you’re building a house, the ceiling is probably dependent upon the walls supporting the roof. If the ceiling is supposed to take three months and is to be completed by 1 June, and the walls were supposed to be completed by 1 March, then if everything is on schedule, the schedule is fine. But if the walls were not completed until 1 May, the ceiling would probably be completed two months later, or 1 August. If the schedule supported dependencies, those tasks dependent upon another task’s completion would be self-adjusting by nearly all scheduling tools.  

A term frequently used with schedules is a “critical path task.” A critical path task influences the project’s end date. If a critical path task is delayed by a day, the project schedule takes a day longer. Nearly every project stakeholder is concerned with when their project will be completed. Project Managers concentrate on assuring their critical path tasks are completed on time or ahead of schedule. Most scheduling tools indicate which tasks are on the critical path. For a complex schedule, say 1,000 tasks, critical path tasks are continuously changing as tasks are completed and delayed. The critical path changes nearly daily for complex projects of 50,000 to 500,000 tasks as progress and events occur.

 

The Waterfall and Agile methodologies have their pluses and minuses. Over a dozen years ago, we came up with the idea of EPPORA (Enterprise Project Portfolio Optimized Resource Allocation). EPPORA improved on Waterfall and Agile for projects by solving the key issues causing failed projects and not satisfying the triple constraint. We concentrated on why projects failed, such as cost overruns, schedule delays, quality compromises where results were not up to expectations, missing features, and customers or end-users being disappointed with the project’s results. Our team spent a significant amount of time and dollars implementing about 85% of a viable EPPORA. We did more Internet searches (mainly Google) than we could count. We determined that the main culprits causing project failure were:

 

  1. Resources (allocation, usage, and productivity)
  2. Requirements (changes, ambiguities, conflicts, linkages, and integration)
  3. Task Scheduling (durations, missing resources, and linkages)
  4. Communication (timeliness, accuracy, and availability)

 

EPPORA solved these dilemmas where stakeholders would no longer have to be skeptical when they heard about this new project that would complete in X days, cost Y dollars (or whatever the monetary unit was), and have Z features. With the other three methodologies, it hardly ever happened as forecasted. Whether the project’s methodology was using a “Just Do It,” a “Waterfall,” or “Agile” methodology, the projects consistently failed the triple constraint (time, cost, and scope). Each succeeding methodology was better than its predecessor. None were transformative, where it would become the exception for a project to fail, not the norm. EPPORA could have solved the majority of the project issues, but alas, it never reached fruition. Why EPPORA never came to market was we ran out of funding. EPPORA was about 85% operational, about ten months from being a viable product. Before the start of February 2021, I had the best idea of my life. Rather than developing a product that resolved the issues involving just projects, why not resolve all the productivity issues associated with everything an organization does to deliver today and tomorrow’s products and services. The idea of solving the entire spectrum of what organizations work at gave birth to the Optimize product. The Optimize product aims to improve an organization’s productivity by using their labor resources to perform their everyday business activities. From the CEO to receptionists to marketing/sales personnel to administrators to everyone involved in the organization are part of the organization’s activities. Organizations conduct projects for improved products or services to the day-to-day operations to keep the organization a viable entity.  

Under processes, there are a variety of activities performed by an organization. The actual processes vary from organization to organization and include the receptionist answering the phone to the janitorial services keeping the offices suitable for conducting the entity’s business, to the marketing and sales teams trying to assure the future is brighter tomorrow than it is today. Large organizations have hundreds if not thousands of processes that their staff performs hourly, daily, weekly, monthly, quarterly, and annually. From the CEO to the people who turn the lights on combine to do all the organization’s work. The staff includes management, legal, manufacturing, distribution, sales, marketing, research, quality assurance, configuration management, production, administration, legal, communication, auditing, accounting, etc. Some staff members are involved in a combination of projects, processes, and products.

 

The Optimize product goal is to make organizations conducting their businesses more efficient. To do so, we optimize how it does the combination of processes, products, and projects. Some people working for an organization work on project activities; others work on products, while others work on processes. Others work a combination of two of the three, and some work on all three activities. Nearly all project management tools only support projects. Optimize uses all the work involved with an organization and includes processes, products, and projects. The combination of the three represents what an organization continuously does to deliver its mission statement. The following are brief descriptions of the significant benefits the Optimize product provides an organization:

 

 

  1. Organization Activities  è Imagine a tool controlling all the activities (work) within an organization. Managers specify what their employees, consultants, and contractors are to work on behalf of the organization. The Optimize product continuously uses AI algorithms for resource allocation, recording staff members expended hours, monitors, analyzes, reports, and warns on processes, products, and projects to the appropriate management personnel as key milestones/deliverables/issues arise. Processes involve the day-to-day activities done by the CEO, directors, management, sales, marketing, administration, accounting, legal, custodial, help-desk, computer support, engineers, scientists, secretaries, receptionists, etc. Each organization’s Process and Process Portfolio Managers define each process by dividing the process into a set of tasks needed for their accomplishment. Products involve the day-to-day activities staff members are assigned to work on for an existing organization’s products. Product and Product Portfolio Managers define the activities involved in supporting their assigned products. Activities are divided into a set of tasks needed for maintaining, enhancing, marketing, selling, distributing, and accounting for the product’s accomplishment. The same attributes for processes are part of each product’s tasks. A process and product’s task attributes are identical to those of a project’s tasks. Projects involve the day-to-day activities all staff members are assigned to work on for an existing organization’s projects. Project and Project Portfolio managers define the activities involved in supporting their assigned projects. In projects, work units are called tasks. Tasks possess the same attributes as their brothers’ processes and products tasks. The Optimize product defines all the organization’s work. Optimize provides critical information for measuring and monitoring an organization’s present and future health. Optimize measurements occur for the individual process, product, and project. It also includes all the individuals working at the organization relative to their productivity and organizational value.

  2. Performance èThe hours staff members spend on processes, products, and projects tasks are recorded relative to estimated and actual hours expended for each task performed. If the individual completes the task in the estimated hours, they have a productivity factor for that task of 1.0. If it takes them twice as long to accomplish as estimated, they have a productivity factor of 0.5. If they accomplish the task in half the estimated time, they have a productivity factor of 2.0. Each labor category’s tasks the staff performs are measured to determine the productivity factor. Optimize product an accumulative productivity factor for each staff member’s supported labor categories after completing each task. Optimize provides continuous statistics about how each individual is performing for each labor category they support. Optimize knows the average hourly salary for each labor category. Optimize calculates each individual’s cost-effectiveness for each supported labor category on a 24x7 basis for management. The benefits of this are apparent and include:

    • Individuals knowing their remuneration depends on their performance, work harder to attempt to be more productive.
    • Management has irrefutable, unbiased data when evaluating the performance of its staff members.
    • Labor resource allocation of work assignments (see below) uses this information to ensure critical work efforts are accomplished promptly by assigning the best available resource to the most crucial activity.

  3. Ranking of Tasks èThe Optimize product ranks the processes, products, and projects tasks. Optimize has thirty-two built-in criteria for ranking each individual process, product, and project. The criteria include cost, ROI, available expertise, synergy with other activities, security, cash flow, alignment with organizational goals, etc. Organizations can define their criteria. The criterion weight represents how vital the criterion is relative to the other criteria. Portfolio managers assign experts to evaluate the activity (process, product, or project) in terms of the chosen criterion. They give it a score between zero and ten. The Optimize product multiplies the score times the weight to determine the “result” for this activity relative to the selected criterion. The sum of the activity’s results, determines the activity’s ranking, be it a process, product, or project. The task of processes, products, and projects assume the ranking of their respective process, product, or projects. Critical path tasks are given a small increment (Process Manager, Product Manager, Project Manager specified) to their ranking for their processes, products, and projects, making them slightly more crucial than non-critical path tasks for the same activity. The ranking of tasks is an essential part of the Optimize product’s labor resource allocation algorithm.

  4. Labor Resource Allocation èThe Optimize product’s primary feature is its US Patented resource allocation algorithm. At the end of each business day, uniquely defined by each organization, The Optimize product locks out all users while it assigns the next work period, uniquely defined by each organization tasks to the organization’s staff, consultants, and contractors. It optimizes this allocation by assigning the most productive individuals to the most critical tasks for the needed labor category. The initial part of the ordering is gathering non-completed process, product, and project tasks scheduled for the work period. Each day a work period is defined for the next N weeks, where each organization uniquely establishes the number of weeks in a work period. N can be any value between two and ten weeks. Since assignments occur daily, individuals have assignments posted to the home page of their current efforts for the next N weeks daily. Thus, no staff member can say they have nothing to do unless there is no work for the next N weeks for their labor categories, they support for the next N weeks. The labor resource allocation algorithm assures the organization’s most productive individuals are continuously doing the most critical tasks daily. An organization’s most crucial efforts always receive the best resources.

  5. Performance Measurement èThe Optimize product measures each organization’s staff member’s performance for each labor category (software engineer, administrative assistant, test engineer, secretary, marketing specialist, sales, etc.) they support. The Optimize product supports any number of labor categories, and each staff member must belong to at least one labor category and can support any number of labor categories. For special labor categories, Portfolio Managers can establish a unique measurement used to evaluate the individual’s productivity for a given labor category instead of the estimated versus expended hours ratio. An example of the unique measurement option’s use is for the “sales” labor category.

  6. Requirements è Ambiguous requirements cause specifications to be understood differently by the assigned staff members, whether their developers, testers, quality assurance, configuration management, end-users, management, or stakeholders. Optimize analyzes each requirement to ensure it is understandable. Meaning it helps ensure the requirements are interpreted the same by all stakeholders. It also makes sure there are:

    • At least one test for each requirement (helping ensure the requirement is tested). 
    • There are tasks scheduled for a requirement’s implementation (ensuring it is implemented).

  7. Schedule è The Optimize product supports the creation of schedules like other popular scheduling tools (Microsoft’s Project, Oracle’s Primavera, etc.). The Optimize product supports critical path analysis. It warns when a schedule does not follow the “best standard practices” established by the industry. The Optimize product provides numerous schedule reports, including Gantt charts.

  8. Analysis è At the end of a business day, The Optimize product analyzes its database to determine which activities: 

    • are not going to satisfy their scheduled delivery dates, 
    • will cost too much, 
    • will have no resources assigned for their fulfillment? 
    • have no test cases verifying their operational success. 

    The analysis results are posted to the appropriate management personnel on their home page to resolve the problems promptly.

  9. Communication è The Optimize product provides a 24x7 status dashboard of active processes, products, and projects. The dashboard includes a schedule and cost performance (SPI and CPI) with an odometer describing the project's health. The Optimize product is a cloud-based product that Internet browsers can access. Key Optimize communication features are available on mobile devices for reporting expended hours and management to access specific process, product, and project statuses on a 24x7 basis. The Optimize product posts to staff members on their home page assigned tasks with a convenient method to report their progress and status changes. They can also do this remotely through their mobile device

  10. Issues, Changes, and Enhancements èThe Optimize product’s Issue Resolution System (IRS) provides an integrated change request system including the specification, monitoring, accessing, controlling of open issues, problems, changes, enhancements, and questions. Managers can generate tasks for open issues. These generated tasks for open issues are prioritized (ranked) and integrated into the normal process, product, and project tasks that appear on the user’s home page.

  11. Testing The Optimize product provides the testing of a project’s requirements by linking each low-level requirement to one or more test cases.

  12. Costs è The Optimize product provides instantaneous costing for processes, products, and projects 24x7.

  13. Workflow è The Optimize product facilitates every staff member knowing their work assignments for the next N weeks. Each assignment is posted to their home page in ranking (importance) order. Staff members use their home page workflow to record their progress and status daily.

  14. Forecasting èThe Optimize product at the end of the business-day, analyzes its database and provides messages for the appropriate management and staff members concerning:

    • Issues with a requirement
    • Issues with a task
    • Issues with estimated cost overruns
    • Missing test cases for verification
    • Insufficient staff members to accomplish proposed work

  15. Templates è The Optimize product templates simplify creating repetitive or near-identical processes, products, and projects.

We used our project management research to build the predecessor to the Optimize product, EPPORA (Enterprise Project Portfolio Optimized Resource Allocation). EPPORA would have eliminated the causes of project failure occurring in the world when conducting projects. About a year ago we had an epiphany during a brainstorming session. We realized that if we could find a cure for the Pareto rule facing nearly every organization relative to the productivity of their staff. We pondered why 80% of the workforce would let the 20% be so significantly more productive? The result was the birth of Optimize. The Optimize product contains the functionality of EPPORA and resolves the reasons so many activities fail the triple constraint. .

 

Just imagine how profitable your organization will be if the average staff member’s productivity increases by 30%. Will your shareholders, management, staff, and end-users be happier? Contact us, and we will demonstrate and discuss how your organization will benefit using the Optimize product..