CASE STUDY: THE BLUE SPIDER PROJECT

This is impossible! Just totally impossible! Ten months ago I was sitting on top of the world. Upper-level management considered me one of the best, if not the best engineer in the plant. ow loo! at me! I have bags under my eyes, I haven"t slept soundly in the last si# months, and here I am, cleaning out my des!. I"m sure glad they gave me bac! my old $ob in engineering. I guess I could have saved myself a lot of grief and aggravation had I not accepted the promotion to pro$ect manager.%

History
&ary 'nderson had accepted a position with (ar!s )orporation right out of college. *ith a (h+ in mechanical engineering, &ary was ready to solve the world"s most traumatic problems. 't first, (ar!s )orporation offered &ary little opportunity to do pure research, which he eagerly wanted to underta!e. ,owever, things soon changed. (ar!s grew into a ma$or electronics and structural design corporation during the big boom of the late fifties and early si#ties when the +epartment of +efence -+o+. contracts were plentiful. (ar!s )orporation grew from a handful of engineers to a ma$or +o+ contractor, employing some /,011 people. +uring the recession of the late si#ties, money became scarce and ma$or layoffs resulted in lowering the employment level to 2,211 employees. 't that time, (ar!s decided to get out of the 3+ business and compete as a low-cost production facility while maintaining ane engineering organisation solely to support production re4uirements. 'fter attempts at virtually every pro$ect management organisational structure, (ar!s )orporation selected the matri# form. 5ach pro$ect had a program manager who reported to the director of program management. 5ach pro$ect also maintained an assistant pro$ect manager, normally a pro$ect engineer, who reported directly to the pro$ect manager and indirectly to the director of engineering. (rogram managers spent most of their time worrying about cost and time, whereas the assistant program managers worried more about technical performance. *ith the poor $ob mar!et for engineers, &ary and his colleagues began ta!ing coursewor! towards an 67' degree, should the $ob mar!et deteriorate further. In 89:0, with the upturn in +o+ spending, (ar!s had to change its corporate strategy. (ar!s had spent the last seven years bidding on the production phase of large programs. 7ut now, with the new evaluation criteria set forth for contract award, those companies winning the 3;+ and 4ualification phases had a definite edge on being awarded the production contract. The production contract was where the big profits could be found. In !eeping with this new strategy, (ar!s began to beef up its 3;+ engineering staff. 7y 89:<, (ar!s had increased in si=e to 2,:11 employees. The increase was mostly in engineering. 5#perienced 3;+ personnel were difficult to find for the salaries that (ar!s was offering. (ar!s was, however, able to lure some employees away from the competitors, but relied mostly upon the younger, ine#perienced engineers fresh out of college.

CASE STUDY: THE BLUE SPIDER PROJECT

*ith the adoption of this corporate strategy, (ar!s )orporation administered a new wage and salary program that included $ob upgrading. &ary was promoted to senior scientist, responsible for all 3;+ activities performed in the mechanical engineering department. &ary had distinguished himself as an outstanding production engineer during the past several years, and management felt that his contribution could be e#tended to 3;+ as well. In January 89:<, (ar!s )orporation decided to compete for (hase I of the 7lue >pider (ro$ect, an 3;+ effort that, if successful, could lead into a ?011 million program spread out over twenty years. The 7lue >pider (ro$ect was an attempt to improve the structural capabilities of the >partan 6issile, a short-range tactical missile used by the 'rmy. The >partan 6issile was e#hibiting fatigue failure after si# years in the field. This was three years less than what the original design specifications called for. The 'rmy wanted new materials that could result in a longer life for the >partan 6issile. @ord Industries was the prime contractor for the 'rmy"s >partan (rogram. (ar!s )orporation would be a subcontractor to @ord if they could successfully bid and win the pro$ect. The criteria for subcontractor selection were based not only on low bid, but also on technical e#pertise as well as management performance on other pro$ects. (ar!s" management felt that they had a distinct advantage over most of the other competitors because they had successfully wor!ed on other pro$ects for @ord Industries.

The Blue Spider Proje t !i "#o$$

An ovember B, 89::, ,enry &able, the director of engineering, called &ary 'nderson into his office. Henry GableC &ary, I"ve $ust been notified through the grapevine that @ord will be issuing the 3D( for the 7lue >pider (ro$ect by the end of this month, with a thirty-day response period. I"ve been waiting a long time for a pro$ect li!e this to come along so that I can e#periment with some new ideas that I have. This pro$ect is going to be my baby all the way! I want you to head up the proposal team. I thin! it must be an engineer. I"ll ma!e sure that you get a good proposal manager to help you. If we start wor! now, we can get close to two months of research in before proposal submittal. That will give us a one-month"s edge on our competitors.% &ary was pleased to be involved in such an effort. ,e had absolutely no trouble in getting functional support for the 3;+ effort necessary to put together a technical proposal. 'll of the functional managers continually remar!ed to &ary that, This must be a biggy. The director of engineering has thrown all of his support behind you.% An +ecember 2, the 3D( was received. The only problem area that &ary could see was that the technical specifications stated that all components must be able to operate normally and successfully through a temperature range of E/0F to 8G0FD. )urrent testing indicated the (ar!s )orporation"s design would not function above 8B1FD. 'n intensive 3;+ effort was conducted over the ne#t three wee!s. 5verywhere &ary loo!ed, it appeared that the entire organisation was wor!ing on his technical proposal.
CASE STUDY: THE BLUE SPIDER PROJECT

' wee! before the final proposal was to be submitted, &ary and ,enry &able met to develop a company position concerning the inability of the preliminary design material to be operated above 8B1FD. Gary AndersonC ,enry, I don"t thin! it is going to be possible to meet specification re4uirements unless we change our design material or incorporate new materials. 5verything I"ve tried indicates we"re in trouble.% Henry GableC *e"re in trouble only if the customer !nows about it. @et the proposal state that we e#pect our design to be operative up to 800FD. That"ll please the customer.% Gary AndersonC That seems unethical to me. *hy don"t we $ust tell them the truthH% Henry GableC The truth doesn"t always win proposals. I pic!ed you to head up this effort because I thought that you"d understand. I could have $ust as easily selected one of our many moral pro$ect managers. I"m considering you for program manager after we win the program. If you"re going to pull this conscientious crap on me li!e the other pro$ect managers do, I"ll find someone else. @oo! at it this wayI later we can convince the customer to change the specifications. 'fter all, we"ll be so far downstream that they will have no choice.% 'fter two solid months of si#teen-hour days, the proposal was submitted. An Debruary 81, 89:< @ord Industries announced that (ar!s )orporation would be awarded the 7lue >pider (ro$ect. The contract called for a ten-month effort, negotiated at ?2.2 million at a firm-fi#ed price.

Sele ti%& the Proje t '(%(&er

Dollowing contract award, ,enry &able called &ary in for a conference. Henry GableC )ongratulations &ary! Jou did a fine $ob. The 7lue >pider (ro$ect has great potential for ongoing business over the ne#t ten years, provided that we perform well during the 3;+ phase. Abviously you"re the most 4ualified person in the plant to head up the pro$ect. ,ow would you feel about a transfer to program managementH% GaryC I thin! it would be a real challenge. I could ma!e ma#imum use of the 67' degree I earned last year. I"ve always wanted to be in program management.% Henry GableC ,aving several master"s degrees, or even doctorate"s for that matter, does not guarantee that you"ll be a successful pro$ect manager. There are three re4uirements for effective program managementC you must be able to communicate both in writing and orallyI you must !now how to motivate peopleI and you must be willing to give up your car pool. The last one is e#tremely important in that program managers must be totally committed and dedicated to the program, regardless of how much time is involved. 7ut this is not the reason why I as!ed you to come here. &oing from pro$ect engineering to program management is a big step. There are only two places you
CASE STUDY: THE BLUE SPIDER PROJECT

can go from program managementI up the organisation or out the door. I !now of very, very few engineers that failed in program management and were permitted to return.% GaryC *hy is thatH If I"m considered to be the best engineer in the plant, why can"t I return to engineeringH% Henry GableC (rogram management is a world of its own. It has its own formal and informal organisational ties. (rogram managers are outsiders. Jou"ll find out. Jou might not be able to !eep the strong personal ties you now have with your fellow employees. Jou"ll have to force even your best friends to comply with your standards. (rogram managers can go from program to program, but functional departments remain intact.% I"m telling you all this for a reason. *e"ve wor!ed well together the past several years. 7ut if I sign the release so that you can wor! for &rey in (rogram 6anagement, you"ll be on your own, li!e hiring into a new company. I"ve already signed the release. Jou still have some time to thin! about it.% GaryC Ane thing I don"t understand. *ith all of the good program managers we have here, why am I given this opportunityH% Henry GableC 'lmost all of our program managers are over forty-five years old. This resulted from our massive layoffs several years ago when we were forced to lay off the younger, ine#perienced program managers. Jou were selected because of your age and because all of our other program managers have wor!ed on only production-type programs. *e need someone at the reigns who !nows 3;+. Jour counterpart at @ord Industries will be an 3;+ type. Jou have to fight fire with fire.% I have an ulterior reason for wanting you to accept this position. 7ecause of the division of authority between program management, who can I communicate with concerning 3;+ wor!H The program managers we have now are interested only in time and cost. *e need a manager who will bend over bac!wards to get performance also. I thin! you"re that man. Jou !now the commitment we made to @ord when we submitted that proposal. Jou have to try to achieve that. 3emember, this program is my baby. Jou"ll get all the support you need. I"m tied up on another pro$ect now. 7ut when it"s over, I"ll be following your wor! li!e a haw!. *e"ll have to get together occasionally and discuss new techni4ues. Ta!e a day or two to thin! it over. If you want the position, ma!e an appointment to see 5lliot &rey, the director of program management. ,e"ll give you the same speech I did. I"ll assign (aul 5vans to you as chief pro$ect engineer. ,e"s a seasoned veteran and you should have no trouble wor!ing with him. ,e"ll give you good advice. ,e"s a good man.%

The )or" Be&i%s

&ary accepted the new challenge. ,is first ma$or hurdle occurred in staffing the pro$ect. The top priority given to him to bid the program did not follow through for staffing. The survival of (ar!s )orporation depended upon the profits received from the production programs. In !eeping with this philosophy &ary found that
CASE STUDY: THE BLUE SPIDER PROJECT

engineering managers -even his former boss. were reluctant to give up their !ey people to the 7lue >pider (rogram. ,owever, with a little support from ,enry &able, &ary formed an ade4uate staff for the program. 3ight from the start &ary was worried that the test matri# called out in the technical volume of the proposal would not produce results that could satisfy specifications. &ary had a milestone, ninety days after go-ahead, to identify the raw materials that could satisfy specification re4uirements. &ary and (aul 5vans held a meeting to map out their strategy for the first few months. Gary AndersonC *ell (aul, we"re starting out with our bac!s against the wall on this one. 'ny recommendationsH% Paul EvansC I also have my doubts in the validity of this test matri#. Dortunately, I"ve been through this before. &able thin!s this is his pro$ect and he"ll sure as hell try to manipulate us. I have to report to him every morning at :CB1 a.m. with the raw data results of the previous day"s testing. ,e wants to see it before you do. ,e also stated that he wants to meet with me alone. @ord will be the big program. If the test matri# proves to be a failure, we"re going to have to change the scope of effort. 3emember, this is an DD( contract. If we change the scope of wor! and do additional wor! in the earlier phases of the program, then we should prepare a trade-off analysis to see what we can delete downstream so as to not overrun the budget.% Gary AndersonC I"m going to let the other pro$ect office personnel handle the administration wor!. Jou and I are going to live in the research labs until we get some results. *e"ll let the other pro$ect office personnel run the wee!ly team meetings.% Dor the ne#t three wee!s &ary and (aul spent virtually twelve hours per day, seven days a wee!, in the research and development lab. one of the results showed any promise. &ary !ept trying to set up a meeting with ,enry &able but always found him unavailable. +uring the fourth wee!, &ary, (aul and the !ey functional department managers met to develop an alternate test matri#. The new test matri# loo!ed good. &ary and his team wor!ed frantically to develop a new wor!able schedule that would not have an impact on the second milestone, which was to occur at the end of 8<1 days. The second milestone was the final acceptance of the raw materials and preparation of production runs of the raw materials to verify that there would be no scale-up differences between lab development and full-scale production. &ary personally prepared all of the technical handouts for the interchange meeting. 'fter all, he would be the one presenting all of the data. The technical interchange meeting was scheduled for two days. An the first day, &ary presented all of the data, including test results, and the ne#t day the test matri#. The customer appeared displeased with the progress to date and decided to have their own in-house caucus that evening to go over the material that was presented.

CASE STUDY: THE BLUE SPIDER PROJECT

The following morning the customer stated their positionC Dirst of all, &ary, we"re 4uite pleased to have a pro$ect manager who has such a command of technology. That"s good. 7ut every time we"ve tried to contact you last month, you were unavailable or had to be paged in the research laboratories. Jou did an acceptable $ob presenting the technical data, but your pro$ect office personnel presented the administrative data. *e, at @ord, do not thin! that you"re maintaining the proper balance between your technical and administrative responsibilities. *e prefer that you personally give the administrative data and your chief pro$ect engineer present the technical data. *e did not receive any agenda. Aur people li!e to !now what will be discussed, and when. *e also want a copy of all handouts to be presented at least three days in advance. *e need time to scrutini=e the data. Jou can"t e#pect us to wal! in here blind and ma!e decisions after seeing the data for ten minutes. To be fran!, we feel that the data to date are totally unacceptable. If the data do not improve, we will have no choice but to issue a stop wor! order and loo! for a new contractor. The new test matri# loo!s good, especially since this is a firm-fi#ed-price contract. Jour company will bear the burden for all costs for the additional wor!. ' trade-off with later wor! may be possible, but this will depend upon the results presented at the second design review meeting, ninety days from now. *e have decided to establish a customer office at (ar!s to follow your wor! more closely. Aur people feel that monthly meetings are insufficient during 3;+ activities. *e would li!e our customer representative to have daily verbal meetings with you or your staff. ,e will then !eep us posted. Abviously, we had e#pected to review much more e#perimental data than you have given us. 6any of our top 4uality engineers would li!e to tal! directly to your engineering community, without having to continually waste time by having to go through the pro$ect office. *e must insist upon this last point. 3emember, your effort may be only ?2.2 million, but our total pac!age is ?811 million. *e have a lot more at sta!e than you people do. Aur engineers do not li!e to get information that has been filtered by the pro$ect office. They want to help you. 'nd last, don"t forget that you people have a contractual re4uirement to prepare complete minutes for all interchange meetings. >end us the original for signature before going to publication. 'lthough &ary was unhappy with the first team meeting, especially with the re4uests made by @ord Industries, he felt that they had sufficient $ustification for their comments. Dollowing the team meeting, &ary personally prepared the complete minutes. This is absurd,% thought &ary. I"ve wasted almost one entire wee! doing nothing more than administrative paperwor!. *hy do we need such detailed minutesH )an"t a rough summary $ust as well sufficeH *hy is it that customers want everything documentedH That"s li!e an indication of fear. *e"ve been completely cooperative with them. There has been no hostility between us. If we"ve gotten this much paperwor! to do now, I hate to imagine what it will be li!e if we get into trouble.%

CASE STUDY: THE BLUE SPIDER PROJECT

A *e+ Role
&ary completed and distributed the minutes to the customer as well as to all !ey team members. Dor the ne#t five wee!s testing went according to plan, or at least &ary thought that it had. The results were still poor. &ary was so caught up in administrative paperwor! that he hadn"t found time to visit the research labs in over a month. An a *ednesday morning, &ary entered the lab to observe the morning testing. Upon arriving in the lab, &ary found (aul 5vans, ,enry &able, and two technicians testing a new material, JK7-B. Henry GableC &ary, your problems will soon be over. This new material, JK7-B, will permit you to satisfy specification re4uirements. (aul and I have been testing it for two wee!s. *e wanted to let you !now, but were afraid that if the word lea!ed out to the customer that we were spending their money for testing materials that were not called out in the program plan, then they would probably go cra=y and might cancel the contract. @oo! at these results. They"re super!% Gary AndersonC 'm I supposed to be the one to tell the customer nowH This could cause a big wave.% Henry GableC There won"t be any wave. Just tell them that we did it with our own 3;+ funds. That"ll please them because they"ll thin! we"re spending our own money to support their program.% 7efore presenting the information to @ord, &ary called a team meeting to present the new data to the pro$ect personnel. 't the team meeting, one functional manager spo!e outC This is a hell of a way to run a program. I li!e to be !ept informed about everything that"s happening here at (ar!s. ,ow can the pro$ect office e#pect to get support out of the functional departments if we"re !ept in the dar! until the very last minuteH 6y people have been wor!ing with the e#isting materials for the last two months and you"re telling us that it was all for nothing. ow you"re giving us a material that"s so new that we have no information on it whatsoever. *e"re now going to have to play catch-up, and that"s going to cost you plenty.% Ane wee! before the 8<1-day milestone meeting, &ary submitted the handout pac!age to @ord Industries for preliminary review. 'n hour later the phone rang. CustomerC *e"ve $ust read your handout. *here did this new material come fromH ,ow come we were not informed that this wor! was going onH Jou !now, of course, that our customer, the 'rmy, will be at this meeting. ,ow can we e#plain this to themH *e"re postponing the review meeting until all of our people have analysed the data and are prepared to ma!e a decision. The purpose of a review or interchange meeting is to e#change information when both parties have familiarity with the topic. ormally we -@ord Industries. re4uire almost wee!ly interchange meetings with our other customers because we don"t trust them. *e disregarded this policy with (ar!s )orporation based upon past wor!ing relationships. 7ut with the new state of developments, you have forced us to revert to our previous position, since we now 4uestion (ar!s )orporation"s integrity in
CASE STUDY: THE BLUE SPIDER PROJECT

communicating with us. 't first we believed this was due to an ine#perienced program manager. ow, we"re not sure.% Gary AndersonC I wonder if the real reason we have these interchange meetings isn"t to show our people that @ord Industries doesn"t trust us. Jou"re creating a hell of a lot of wor! for us, you !now.% CustomerC Jou people put yourself in this position. ow you have to live with it.%

Two wee!s later @ord reluctantly agreed that the new material offered the greatest promise. Three wee!s later the design review meeting was held. The 'rmy was definitely not pleased with the prime contractor"s recommendation to put a new untested material into a multi-million-dollar effort.

The Co,,u%i (tio%s Bre("do+%

+uring the wee! following the design review meeting &ary planned to ma!e the first verification mi# in order to establish final specifications for selection of the raw materials. Unfortunately, the manufacturing plans were a wee! behind schedule, primarily because of &ary, since he had decided to reduce costs by accepting the responsibility for developing the bill of materials himself. ' meeting was called by &ary to consider rescheduling of the mi#. Gary AndersonC 's you !now we"re about a wee! to ten days behind schedule. *e"ll have to reschedule the verification mi# for late ne#t wee!.% Production ManagerC Aur resources are committed until a month from now. Jou can"t e#pect to simply call a meeting and have everything reshuffled for the 7lue >pider (rogram. *e should have been notified earlier. 5ngineering has the responsibility for preparing the bill of materials. *hy aren"t they readyH% Engineering IntegrationC *e were never as!ed to prepare the bill of materials. 7ut I"m sure that we could get it out if we wor! our people overtime for the ne#t two days.% GaryC *hen can we rema!e the mi#H% Production ManagerC *e have to redo at least 011 sheets of paper every time we reschedule mi#es. ot only that, we have to reschedule people on all three shifts. If we are to reschedule your mi#, it will have to be performed on overtime. That"s going to increase your costs. If that"s agreeable with you, we"ll try it. 7ut this will be the first and last time that production will bail you out. There are procedures that have to be followed.% Testing EngineerC I"ve been coming to these meetings since we !ic!ed off this program. I thin! I spea! for the entire engineering division when I say that the role that the director of engineering is playing in this program is suppressing individuality among our highly competent personnel. In new pro$ects, especially those involving 3;+, our people are not apt to stic! their nec!s out. ow our people are becoming ostriches. If they"re prevented from contributing, even in their own slight way, then
CASE STUDY: THE BLUE SPIDER PROJECT

you"ll probably lose them before the pro$ect gets completed. 3ight now I feel that I"m wasting my time here. 'll I need are minutes of the team meetings and I"ll be happy. Then I won"t have to come to these pretend meetings anymore.% The purpose for the verification mi# was to ma!e a full-scale production run of the material to verify that there would be no material property changes in scale-up from the small mi#es made in the 3;+ laboratories. 'fter testing, it became obvious that the wrong lots of raw materials were used in the production verification mi#. @ord Industries called a meeting for an e#planation of why the mista!e had occurred and what the alternatives were. LordC *hy did the problem occurH% GaryC *ell, we had a problem with the bill of materials. The result was that the mi# had to be made on overtime. 'nd when you wor! people on overtime, you have to be willing to accept mista!es as being a way of a life. The energy cycles of our people are slow during the overtime hours.% LordC The ultimate responsibility has to be with you, the program manager. *e, at @ord, thin! that you"re spending too much time doing and not enough time managing. 's the prime contractor, we have a hell-of-a-lot more at sta!e than you do. Drom now on we want documented wee!ly technical interchange meetings and closer interaction by our 4uality control section with yours.% GaryC These additional team meetings are going to tie up our !ey people. I can"t spare people to prepare handouts for wee!ly meetings with your people. LordC Team meetings are a management responsibility. If (ar!s does not want the 7lue >pider (rogram, I"m sure we can find another subcontractor. 'll you -&ary. have to do is to give up ta!ing the material vendors to lunch and you"ll have plenty of time for handout preparation.% &ary left the meeting feeling as though he had $ust gotten ra!ed over the coals. Dor the ne#t two months, &ary wor!ed si#teen hours a day, almost everyday. &ary did not want to burden his staff with the responsibility of the handouts, so he began preparing them himself. ,e could have hired additional staff but with such a tight budget, and having to rema!e the verification mi#, cost overruns appeared inevitable. 's the end of the seventh month approached, &ary was feeling pressure from within (ar!s )orporation. The decision-ma!ing process appeared to be slowing down and &ary found it more and more difficult to motivate his people. In fact, the grapevine was referring to the 7lue >pider (ro$ect as a loser, and some of his !ey people acted as though they were on a sin!ing ship. 7y the time the eighth month rolled around, the budget had nearly been e#pended. &ary was tired of doing everything himself. (erhaps I should have stayed in engineering,% thought &ary. 5illiot &rey and &ary 'nderson had a meeting to see what could be salvaged. &rey agreed to get &ary additional corporate funding to complete the pro$ect. 7ut performance must be met, since there is a lot riding on the

CASE STUDY: THE BLUE SPIDER PROJECT

7lue >pider (ro$ect,% asserted &rey. program status.

,e called a team meeting to identify the

GaryC It"s time to map out our strategy for the remainder of the program. )an engineering and production adhere to the schedule that I have laid out before youH% Team Member: EngineeringC This is the first time I"ve seen this schedule. Jou can"t e#pect me to ma!e a decision in the ne#t ten minutes and commit the resources of my department. *e"re getting a little unhappy being !ept in the dar! until the last minute. *hat happened to effective planningH% GaryC *e still have effective planning. *e must adhere to the original schedule, or at least try to adhere to it. This revised schedule will do that.% Team Member: EngineeringC @oo! &ary! *hen a pro$ect gets in trouble it is usually the functional departments that come to the rescue. 7ut if we"re !ept in the dar!, then how can you e#pect us to come to your rescueH 6y boss wants to !now, well in advance, every decision that you"re contemplating with regard to our departmental resources. 3ight now, we L% GaryC &ranted, we may have had a communications problem. 7ut now we"re in trouble and have to unite forces. *hat is your impression as to whether your department can meet the new scheduleH% Team Member: EngineeringC *hen the 7lue >pider (rogram first got in trouble, my boss e#ercised his authority to ma!e all departmental decisions regarding the program himself. I"m $ust a puppet. I have to chec! with him on everything.% Team Member: ProductionC I"m in the same boat, &ary. Jou !now we"re not happy having to reschedule our facilities and people. *e went through this once before. I also have to chec! with my boss before giving you an answer about the new schedule.% The following wee! the verification mi# was made. Testing proceeded according to the revised schedule, and it loo!ed as though the total schedule milestones could be met, provided that specifications could be adhered to. 7ecause of the revised schedule, some of the testing had to be performed on holidays. &ary wasn"t pleased with as!ing people to wor! on >undays and holidays, but had no choice, since the test matri# called for testing to be accomplished at specific times after end-of-mi#. ' team meting was called on *ednesday to resolve the problem of who would wor! on the holiday, which would occur on Driday, as well as staffing >aturday and >unday. +uring the team meeting &ary became 4uite disappointed. (hil 3odgers, who had been &ary"s test engineering since the pro$ect started, was assigned to a new pro$ect that the grapevine called &able"s new adventure. ,is replacement was a relatively new man, only eight months with the company. Dor an hour and a half the team members argued about the little problems and continually avoided the ma$or 4uestion, stating that they would have to first coordinate commitments with their
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boss. It was obvious to &ary that his team members were afraid to ma!e ma$or decisions and therefore ate up% a lot of time on trivial problems. An the following day, Thursday, &ary went to see the department manager responsible for testing, in hopes that he could use (hil 3odgers this wee!end. Department ManagerC I have specific instructions from the boss -director of engineering. to use (hil 3odgers on the new pro$ect. Jou"ll have to see the boss if you want him bac!.% Gary AndersonC 7ut we have testing that must be accomplished this wee!end. *here"s the new man you assigned yesterdayH% Department ManagerC obody told me you had testing scheduled for this wee!end. ,alf of my department is already on an e#tended wee!end vacation, including (hil 3odgers and the new man. ,ow come I"m always the last to !now when we have a problemH% Gary AndersonC The customer is flying down their best people to observe this wee!end"s tests. It"s too late to change anything. Jou and I can do the testing.% Department ManagerC ot on your life. I"m staying as far away as possible from the 7lue >pider (ro$ect. I"ll get you someone, but it won"t be me. That"s for sure!% The wee!end"s testing went according to schedule. The raw data were made available to the customer under the stipulation that the final company position would be announced at the end of ne#t month, after the functional departments had a chance to analyse it. Dinal testing was completed during the second wee! of the ninth month. The initial results loo!ed e#cellent. The materials were within contract specifications, and although they were new, both &ary and @ord"s management felt that there would be little difficulty in convincing the 'rmy that this was the way to go. ,enry &able visited &ary and congratulated him on a $ob well done. 'll that now remained was the ma!ing of four additional full-scale verification mi#es in order to determine how much deviation there would be in material properties between full-si=ed production-run mi#es. &ary tried to get the customer to concur -as part of the original trade-off analysis. that two of the four production runs could be deleted. @ord"s management refused, insisting that contractual re4uirements must be met at the e#pense of the contractor. The following wee!, 5lliot &rey called &ary in for an emergency meeting concerning e#penditures to date. Elliot GreyC &ary, I $ust received a copy of the financial planning report for last 4uarter in which you stated that both the cost and performance of the 7lue >pider (ro$ect were :0 percent complete. I don"t thin! you reali=e what you"ve done. The target profit on the program was ?211,111. Jour memo authori=ed the vice-president and general manager to boo! :0 percent of that, or ?801,111 for corporate profit spending for stoc!holders. I was planning on using all ?211,111 together with the
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additional ?B11,111 I personally re4uested from corporate head4uarters to bail you out. ow I have to go bac! to the vice-president and general manager and tell them that we"ve made a mista!e and that we"ll need an additional ?801,111.% Gary AndersonC (erhaps I should go with you and e#plain my error. Abviously, I ta!e all responsibility.% Elliot GreyC o, &ary. It"s our error, not yours. I really don"t thin! you want to be around the general manager when he sees red at the bottom of the page. It ta!es an act of &od to get money bac! once corporate boo!s it as profit. (erhaps you should reconsider pro$ect engineering as a career instead of program management. Jour performance hasn"t e#actly been spar!ling, you !now.% &ary returned to his office 4uite disappointed. o matter how hard he wor!ed, the bureaucratic red tape of pro$ect management seemed to always do him in. 7ut late that afternoon, &ary"s disposition improved. @ord Industries called to say that, after consultation with the 'rmy, (ar!s )orporation would be awarded a sole-source contract for 4ualification and production of >partan 6issile components using the new longer-life raw materials. 7oth @ord and the 'rmy felt that the sole-source contract was $ustified, provided that continued testing showed the same results, since (ar!s )orporation had all of the technical e#perience with the new materials. &ary received a letter of congratulations from corporate head4uarters, but no additional pay increase. The grapevine said that a substantial bonus was given to the director of engineering. +uring the tenth month, results were coming bac! from the accelerated aging tests performed on the new materials. The results indicated that although the new materials would meet specifications, the age life would probably be less than five years. These numbers came as a shoc! to &ary. &ary and (aul 5vans had a conference to determine the best strategy to follow. Gary AndersonC *ell, I guess we"re now in the fire instead of the frying pan. Abviously, we can"t tell @ord Industries about these tests. *e ran them on our own. )ould the results be wrongH% Paul EvansC >ure, but I doubt it. There"s always margin for error when you perform accelerated aging tests on new materials. There can be reactions ta!ing place that we !now nothing about. Durthermore, the accelerated aging tests may not even correlate well with actual aging. *e must form a company position on this as soon as possible.% Gary AndersonC I"m not going to tell anyone about this, especially ,enry &able. Jou and I will handle this. It will be my throat if word of this lea!s out. @et"s wait until we have the production contract in hand.% Paul EvansC That"s dangerous. This has to be a company position, not a pro$ect office position. *e had better let them !now upstairs.% Gary AndersonC I can"t do that. I"ll ta!e all responsibility. 're you with me on thisH%
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Paul EvansC I"ll go along. I"m sure I can find employment elsewhere when we open (andora"s bo#. Jou had better tell the department managers to be 4uiet also.% Two wee!s later, as the program was winding down into the testing for the final verification mi# and final report development, &ary received an urgent phone call as!ing him to report immediately to ,enry &able"s office. Henry GableC *hen this pro$ect is over, you"re through. Jou"ll never hac! it as a program manager, or possibly a good pro$ect engineer. *e can"t run pro$ects around here without honesty and open communications. ,ow the hell do you e#pect top management to support you when you start censoring bad news to the topH I don"t li!e surprises. I don"t li!e to get the bad news from the program managers and pro$ect engineers, most of all not second-hand from the customer. 'nd of course, we cannot forget the cost overrun. *hy didn"t you ta!e some precautionary measuresH% Gary AndersonC ,ow could I when you were as!ing our people to do wor! such as accelerated aging tests that would be charged to my pro$ect and was not part of the program planH I don"t thin! that I"m totally the blame for what"s happened.% Henry GableC &ary, I don"t thin! it"s necessary to argue the point any further. I"m willing to give you bac! you old $ob, in engineering. I hope you didn"t lose too many friends while wor!ing in program management. Dinish up final testing and the program report. Then I"ll reassign you.% &ary returned to his office and put his feet up on the des!. *ell,% thought &ary, perhaps I"m better off in engineering. 't least I can see my wife and !ids once in a while.% 's &ary began writing the final report, the phone rangC unctional ManagerC ,ello &ary. I $ust thought I"d call to find out what charge number you want us to use for e#perimenting with this new procedure to determine accelerated age life.% Gary AndersonC +on"t call me! )all &able. 'fter all, the 7lue >pider (ro$ect is his baby.%

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