5 Ways Small Companies Make Big Project Management Mistakes

Small companies are just like big companies, only with fewer resources and less margin for error.   When the owner has so many responsibilities and feels unable to delegate, we often find that there is insufficient focus on Project Management discipline.   By nature many entrepreneurs are risk takers and put “getting things done” ahead of process.  Unfortunately, this sometimes results in too little planning, underestimating risks and failing to set expectations with key stakeholders.

The following are some of the Project Management mistakes that small companies often make and some guidance on how to avoid these situations.

Being too cheap with technology

“We can do things the cheap way, the simple way, for the short-term and without regard for the future. Or, we can make the extra effort, do the hard work, absorb the criticism and make decisions that will cause a better future.”   Mike Rounds

Many small companies do not have the luxury of purchasing complex technologies and adopt the attitude that free is best.  Instead of purchasing a new software for Project Management they will use Excel and for Collaboration they will rely on social media platforms such as Facebook chat.

The problem is that this approach provides a false sense of cost savings at the expense of lost productivity.  Excel is only useful for high level task tracking – there is no document management, dependency setting or other rudimentary features that one expects from a Project Management tool.  Using free social media platforms opens to the door to employee time wasting:  Facebook should be checked at the door, not invited into the workplace.

With Binfire, we provide a low cost entry point starting at $19 for a platform that combines both Project Management and Collaboration.  For a free, 30 day no obligation trial, click here.

Not planning for growth

“Growth is never by mere chance; it is the result of forces working together.”  James Cash Penney

Even though small companies are often managed by visionaries, owners sometimes forget that what they build now needs to take future growth into consideration.  Just like it is prudent to lease an office with an option to expand, small businesses need to view Project Management through the same lens.

First, when it comes to a process or methodology, some small businesses take the approach of “making it up as they go along.”   Perhaps there are some circumstances that warrant this approach, but companies that expect to mature in the coming future need to realize that as they add new personnel to the organization there need to be predictable processes in place.

From a tool perspective, management needs to remember that as the business scales, so will the complexity of projects and that tools need to be robust.  That does not mean that expensive software is required, but it does mean that whatever Project Management solution that is purchased must be as useful for a team today as it will be for the team in 12, 36 or 48 months’ time.

Ignoring Project Risk

“Don’t judge each day by the harvest you reap but by the seeds that you plant.”  Robert Louis Stevenson

Many companies in their infancy have high risk tolerance and as they mature become more conservative in nature.   Before coming up with a plan to manage risk, the small company needs to understand its source – whether risk comes from changing market conditions, under-estimation of cost or unrealistic revenue forecasts.

Risk panning is one of the core elements in any project plan and instead of dismissing risk planning as an exercise in bureaucracy, the assigned project management should develop practical plans on how to counter risk as it arises.

Prioritizing End-Results at the Expense of Process

“Excellence is a continuous process and not an accident.”  P. J. Abdul Kalam

Small companies face a lot of different pressures, ranging from managing cash flow to supporting very customers.  In this environment it may be tempting to put aside formal processes at the expense of the short term goal of winning a new customer or completing a production run.

In the Project Management arena, there is an emphasis on careful planning and discipline.  For the untrained project manager who is learning Project Management on the job (a common scenario), there is often resistance to understanding methodology or to be overwhelmed by the complexity of the Project Management terminology.

Small businesses may not realize that many Project Management principles are based on common sense practices that are only intimidating from a distance.   Resource Planning, Floats, Work Breakdown Structure and Task Analysis are actually concepts that require a small investment in time to understand.

Failing to Assign the Right Resources on a Project

Failing to plan is planning to fail.”  Alan Lakein

In a small company it is not uncommon for someone to have two or even three job titles.  Whereas a saleswoman in a small company might also be the marketing coordinator and event planner in larger organization each of these roles will be assigned to different individuals.

While there are many benefits from multi-tasking and in some ways the creative pressure brings out the best of people, employee constraints can do significant harm to a project.   If employees are not properly qualified to perform a task, the overall project could be at risk.  Sometimes people have the qualification but simply do not have the necessary experience.

Small companies project managers need to realistic about the strengths and weakness of a project team and if necessary must have the confidence to set expectations with business owner about the lack of adequate project resources and the likely impact of overall results.

Do you work at a small company?   We’d love to hear feedback on how you use project management software.

David Robins

David Robins is the founder and CEO of Binfire. David studied at both Cornell and MIT, and was the Director of Software Engineering at Polaroid for 11 years.

No Comments Yet

Leave a Reply

Your email address will not be published.