Goldilocks Dilemma: Getting Project Scope ‘Just Right’

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y Malcolm Upton

One of the hardest decisions teams and their sponsors make is picking the right scope for a project. Those who choose easy, bite-sized projects often have a high success rate – but the impact sometimes is so small that the general reaction is "so what" or "is that all that Lean Six Sigma can do for us?" On the other hand, those who lean toward projects that are too large do not fare any better. They lose energy and focus as projects drag on for 6, 12, or even 18 months or more. And if they manage to complete the project, the results may be irrelevant to what is happening in the company by that time.

The best course is to aim for a project that can be completed in three to four months and that will generate enough of an impact to contribute towards achieving an important strategic goal. How does a team leader or Sponsor know how much a team can accomplish in three to four months? There is no precise answer, but there are several simple tricks of the trade that can help in making reasonable guesses.

Trick 1: Rate Alternatives on Difficulty

The first trick lives upstream of the project, in the executive suite where projects are born and prioritized. During the project identification process, it is very important for the executive team to prioritize the projects according to both their impact and their difficulty. Impact is related to the organization's strategic goals, but difficulty is, in part, related to how long the project can be expected to complete.

For example, in order to better meet the strategic goal of "improved customer service," one bank wanted to speed up its loan processing time. The team considered three possible goals:

Option 1: Cut time by 20 percent
Option 2: Cut time by 50 percent
Option 3: Cut time by 70 percent

Although Option 1 could definitely be done in less than three months making it a relatively low-effort project, the executive team was worried that the improvement would not be great enough to address customer complaints and the strategic objective. Option 3 would definitely be noticed by customers, and definitely address the strategic objective, but the executive team was not sure that the bank had the improvement skills yet to get it done in a reasonable time and that perhaps brand new technologies would be required. Therefore Option 3 was rated high on impact but also high on difficulty.

The project goal adopted was Option 2. The executive team knew from experience that there were a lot of process problems that could probably be addressed quickly, and thought that cutting the process time in half would definitely be noticed by customers and improve customer service.

Trick 2: Use In-and-Out-of-Scope Tool

Sometimes a situation is so complex that there are many directions a company could pursue that would serve a particular goal. One way to deal with that situation is to use what is called the in-and-out-of-scope tool. This tool can be used by the executive team that is defining a project or a project team that wants to clarify its understanding of the assignment (with the proviso that the team's decisions are checked with its advisor or sponsor).

The steps in creating an in-and-out-of-scope diagram are simple:

1. Team members individually brainstorm elements of the project (any thing is fair game at this stage) and write their ideas on self-stick notes.
2. The team leaders draws a circle on a flip chart to indicate the project boundaries. (Often the drawing is a bull's-eye to allow the team to make decisions about the relative importance of each factor to a strategic goal.)
3. Team members place their notes either inside or outside the circle's boundaries to show whether they think the element is within the project's scope or not. If using the bull's-eye format, the closer the factor relates to achieving a strategic goal, the closer to the center the note is placed, as in the figure below.
4. Team members discuss and come to agreement as a group.

Scoping with a Bull's-Eye

Based on this exercise, an executive team decided that it would charter a project focused primarily on an overnight check depositing service (Service M) provided to large businesses at two locations (Sites B and C). The goals would focus on improving speed while decreasing errors. If necessary, the team also could look at Service N (a follow-on processes) and go to Site A as well. What the team should not concern itself with at this time were all other services – any small business customers, any other locations and the cost of providing the service.

Trick 3: Think Multigenerational

Another way to help team members settle on a project goal that is doable within three to four months is to designate more challenging ideas for future projects. Documenting these options helps a team:

• Make measurable progress quickly without having to abandon larger issues.
• Be confident that these larger issues will be addressed in the future.

An example of multigenerational project plan is shown in the table below.

Multigenerational Auto Loan Process
	Generation 1	Generation 2	Generation 3
Vision	> Provide consistent solutions and responses to the customer > Reduce customer complaints by 85%	> Best-in-class customer service > Increase revenues by 35%	> Industry leader in auto loan policies
Process Generation	> Standardize auto loan application procedures across all locations	> Introduce "direct-to-customer" marketing concept	> Integrate auto loan policies with other consumer offerings > Implement instantaneous loan approval process
Platforms and Technology	> Update auto loan divisions' hardware and software to current standards across all locations	> Centralize rating database for all locations > Web-based loan application processing platform	> Automated policy fulfillment process

For this auto loan process, the initial project (Generation 1) would focus on consistency and standardization. Generation 2 would target improving from the solid baseline established in Generation 1 to achieve world-class service levels, which would require the development of some new supporting processes. From there, the bank could then strive for even more innovative ways to meet customer needs (Generation 3).

To create a multigenerational project plan, identify as many aspects of the problem as possible (through brainstorming and/or by capturing ideas surfaced during a project). Decide which issues must be addressed right away and can be done within three months or so (the first generation of the project) and which need to be deferred to a later generation project. For example:

• The goal is to reduce billing errors for all customers. The first generation will deal with problems with the top 20 percent of customers.
• This project will streamline the process and reduce the number of errors. The next phase will be to implement an automated information system.

As the team's work progresses, new ideas can be added to future generations of the process rather than increasing the project completion time and delaying value realization for the first generation scope.

Conclusion: Agreement on Scope and Goals

Sometimes a project teams interpret the scope of its charter differently from what the executive team or Sponsor had in mind, or finds that the scope was not defined well at the beginning of the project. Using tools like an impact/difficulty discussion, an in-and-out-of-scope bull's-eye, and multigenerational planning can help Sponsors and teams not only set reasonable goals but make sure that all parties are agreeing on the same goals.

About the Author: Malcolm Upton is a Lean Six Sigma Master Black Belt with more than 17 years of experience in process improvement. Federal curriculum manager for George Group, he has personally led nearly 100 improvement projects with individual project benefits up to $300 million. Dr. Upton also has trained and coached hundreds of Black Belts and Green Belts in their own improvement projects. He can be reached at mupton@georgegroup.com.

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