In the first article on this two part series we talked about two areas of project management that can help you reach your goals and become more successful: scope and time management.  In this article we will review three other areas of project management that can also be used to you benefit in your quest for success:  cost, quality and risk management.

Cost Management

Any worthwhile pursuit in life will cost you something.  It may cost you money, or it may simply cost time and effort.  You need to understand the costs and the benefits and compare one against the other to decide if the pursuit is worthwhile.  For example, if you decide to get a masters degree with the goal of getting a better job and an increase in salary, you need to consider not only the cost of getting your masters, but also the amount of time it will take you away from work, or the salary that you will potentially give up in order to pursue this goal.  This is called opportunity cost.  Once you have added up all your costs, compare to the additional salary you will receive in the remaining years of your career and decide if it will pay off.  Obviously this will require making some assumptions.  Write down your assumptions so that they are clear in your mind.

One important concept in cost management is what is called sunk costs.  Sunk costs are costs that were incurred in the past, and should no longer be taken into account when deciding on a future course of action.  For instance, if you have already spent a certain amount of money pursing a degree in an area that you decided is not right for you, but you have not finished it, don’t finish it just because you have already spent some money on it.  In other words, don’t throw good money after bad money.

Once you have decided that your project is a worthwhile pursuit, you need to create a budget for you project.  Yes, I know, budgets are not much fun.  But it is an important component of financial success.  Understand how much it will cost to complete your project and track your progress against your budget.  If you find out that you are getting off track, think about what you can do to get your cost under control.   If a change is introduced, understand the impact to your budget.

Quality Management

Quality is an important component of project management.  One of the key concepts of quality management that you should understand is that it is most cost effective to do things right the first time than to have to rework it later.  When you are working on a task, take the time and effort to do it right upfront.  This does not mean that you can’t improve.  Continuous improvement should be part of your strategy to get better at everything you do.  But don’t rush to get the task done if that means you will have to rework it later.

One of the techniques in quality management that you can use to your benefit is the reduction of variability.  The more consistent you are in your project, the higher the likelihood that you will end up with a high quality product.  For example, continuing with the kitchen renovation theme started in the first article, if you are replacing the cabinetry in your kitchen try to stick to standard materials and tools that were designed to do the job.  Think about whether you have the skills and the tools to the job yourself, or whether you should hire a professional who has done this hundreds of times before, therefore reducing variability.

One additional quality tool for your arsenal is what is called Pareto analysis.  In layman’s terms, this is the 80-20 rule which says that 80% of your problems will come from 20% of the work.  If you know the areas where you will most likely have quality problems, spend a little more in those areas.  For example, in a kitchen renovation project, you may decide to do the wood work yourself, but leave the electric wiring to a professional if you know that this is where you will have the most problems and the highest risk if it is not done right.

Quality does not necessarily mean spending more, or doing something fancier than what you have originally planned.  In fact, from a project management perspective, a quality project delivers an end result that meets the requirements and fitness of use, nothing more, nothing less.  If your original kitchen renovation plan included replacing the appliances with equivalent but newer ones, buying fancier appliances would not increase the quality of your project.  The quality of your project should be measured by whether the new appliances are installed and functioning according to your original plans.

Risk Management

Last but not least, managing risk is key to the success of your project and your personal success.  Understand the risks of your project by listing things that can go wrong, the impact of those risks, and the likelihood that they will occur.  Focus on the ones that have the highest probability and the biggest impact.  Think ahead of time about how you will react if these risks are triggered.

For example, what can go wrong with a kitchen renovation project?  Well, the contractor may not be available in the timeframe you need to get your project completed.  Create a contingency plan and have another contractor in your back pocket just in case your original contractor becomes unavailable.  What if you find out the cost of the material is higher than you had originally estimated?  Have some reserves in place for time and money so that you can deal with these types of surprises.  The most important part of risk management is the thinking that you put into getting prepared for when those risks do occur.  You’ve heard the old cliché: better safe than sorry.

This concludes this two part series of how project management techniques can help you achieve your goals and help you become a more successful person.