Housing and Stock Prices over 120 years

The Nobel Prize in Economics went to three economists including Shiller, who theorized about housing price bubbles and P/E overpricing. I like the graphic that went along with the article and want to access it myself at times so I post it here for anyone's convenience.

Placed next to each other like the New York Times did in another example of their excellent graphics department, one can see how a soaring stock market drives a housing bubble. The drop we saw in 2006 was predicted and we still seem a little high so don't get that second mortgage to finance your child's education just yet.

The Art of Project Management - Chapter One

Having recently read Sun Tzu's 'Art of War' I saw many similarities between war and managing projects. Call the enemies risk and chaos and most of the 2,500 year old advice applies quite well. So I am going to dedicate a few posts to what I humbly call: 'The Art of Project Management.' I give Sun Tzu full credit for his observations. I simply paraphrase him to shift the advice to my field.

Chapter One

Laying Plans

1. Sun Tzu said: The Art of Project Management is of vital importance to the company.

2. It is a matter of survival or bankruptcy, a road either to success or to ruin. Hence it is a subject of inquiry which can on no account be neglected.

3. The Art of Project Management, then, is governed by five constant factors, to be taken into account in one's deliberations, when seeking to determine the conditions obtaining in the field.

4. These are (1) The Moral law; (2) Heaven; (3) Earth; (4) The Project Manager; (5) Method and Discipline.

5,6. The Moral Law causes the Project Team to be in complete accord with the senior staff, so that they will follow them regardless of their careers, undismayed by any danger.

7. Heaven signifies night and day shift, winter and summer, times and seasons.

8. Earth comprises distances, great and small and the technologies used to cross these distances.

9. The Project Manager stands for the virtues of wisdom, sincerity, benevolence, courage and strictness.

10. By Method and Discipline are to be understood the forming of the team in its proper extended teams, the graduations of rank between leaders, extended team leaders and team members, the maintenance of vendor supply lines and control of budget.

11. These five heads should be familiar to every Project Manager: he who knows them will be successful; he who knows them will not fail.

12. Therefore, in your deliberations, when seeking to determine to best project, let them be made the basis of a comparison, in this wise:

13. (1) Which of the two projects is most in accord with the Moral Law?

      (2) Which of the two Project Managers has the most ability?

      (3) With whom lie the advantages derived from Heaven and Earth?

      (4) On which side are methods and discipline most rigorously enforced?

      (5) Which Project Team is stronger?

      (6) On which team are the leaders more highly trained?

      (7) On which team is there the greater constancy both in reward and punishment?

14. By means of these seven considerations I can forecast success or failure.

15. The Project Manager that hearkens to my counsel and acts upon it, will succeed: let such a one be retained in command! The Project Manager that hearkens not to my counsel nor acts upon it, will fail: let such a one be dismissed!

16. While heeding the profit of my counsel, avail yourself also of any helpful circumstances over and beyond the ordinary rules.

17. According as circumstances are favorable, one should modify one's plans.

Dear PM Advisor. Oct 15, 2013

Dear PM Advisor,

Last week 'Ignorant in California' asked what stakeholders were. I defined the term and how to identify them but didn't explain what to do about stakeholders. In this post I will go over the next step in dealing with stakeholders: Stakeholder Management. 

Once you have your list of stakeholders, you should get together with your team, BEHIND CLOSED DOORS, and fill out this grid:

Power Interest Grid:

You do this behind closed doors and hide the results from the stakeholders because you don't want the VP Human Resources to find out that you consider his power to be minimal. It's a simple job to fill it out. Write the stakeholders names on post-its and move it around the grid until your team agrees where they stand. Then manage them accordingly.

Nex tthing to do is come up with a communications matrix. Here's an example from my novel in progress. You list your stakeholders on one axis and your types of communications on the other axis. Then visit each of the stakeholders, explain your project, show the different forms of communications you will be putting out and ask them three questions:

1. Which of these communications do you want?
2. How often do you want them?
3. In what media would you like them? (Verbal, face-to-face, electronic, paper, etc.)

D = daily, I = as issued, Q= quarterly, W = weekly

You'll have to either color code or put a slash through each box to indicate the media or frequency of receiving communications.

Then do what you promised. 90% of a Prokject Manager's job is communication. Make sure you do this right.

Good luck,

Dear PM Advisor.

Send your questions to Bruce@RoundTablePM.com

The Pope leads with humility

I'm so proud of our new pope! There are thousands of articles, radio and TV interviews and social media posts discussing how humble this new leader is. From the moment he was elected and chose to pay his own bill in the residence, we knew we had someone new in charge.

He is quietly taking on the staid traditions of the church, not allowing himself or the church be intimidated by the 'gay lobby' and all the entrenched bureaucracy. To the general public he is embracing everyone, including atheists. He is backing down from the controversial positions the church has held, not rejecting them, but refusing to let these positions alienate people.

Too bad the man isn't younger. I'm looking forward to many years of his stewardship of the Catholic church.

Dear PM Advisor. Oct 7, 2013

Dear PM Advisor,

I feel dumb asking this question but I've never heard a satisfactory answer. What is a stakeholder?

Ignorant in California

Dear Ignorant,

I can't resist answering your question with the one carrot top style joke I use in my project management class. With a broad Australian accent, I hold this up and say: 

"Stakeholder. Australian for fork."

I know it's corny but it gets a laugh and keeps my students interested. 

But let me give you a serious answer. I'll start with the official PMI definition and then I'll tell you what it really mean.

Stakeholder: Person or organization that is actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project. A stakeholder may also exert influence over the project and its deliverables. (PMBOK 4th edition)

Not very useful. The fifth edition doesn't make it much clearer:

An individual, group or organization who may affect, be affected by or perceive itself to be affected by a decision, activity or outcome of a project. (PMBOK 5th edition)

Here is what I teach in my class: 

Stakeholders are people who care about your project. They come from five different groups. Four are easy to determine, the fifth is what makes your life difficult.

• Project Manager
• Team Members
• Customer
• Sponsor
• Functional Management 

One of your more difficult jobs will be to determine which of the many functional managers, directors, vice presidents etc. care about your project and are going to actively involve themselves in its success or failure. (Yes, some may lobby to have your project fail. Think about projects where the goal is to transfer production from one facility to a cheaper one or the shutdown of a facility.)

Your sponsor is the first place to start when identifying all your stakeholders. He/she can tell you the political climate surrounding your project and who cares about it, what power they wield and how to satisfy them. 

Add to this list the managers of each of your team members and ask them who they know who might be concerned about the project. 

Those combined lists become your list of identified stakeholders, the only thing other than creating a project charter that you need to do during Project Initiation.

Next week I'll talk about how to deal with this group.

Good luck,

Dear PM Advisor.

Send your questions to Bruce@RoundTablePM.com

Seventieth excerpt from 'Twelve Towers'

         The next morning they set out for Salthouse, arriving a day ahead of schedule. On settling back into their lodgings, Gwilym stopped Fred for a minute. “I’ve been so concerned about myself I forgot to ask about you. How is Heilin?”

         Fred gave a broad smile. “Pregnant. Huge with child. I’m to be a father in th’spring!”

         “That’s wonderful, Fred! Congratulations! This will be a new life for you! You are going to be the greatest father! I’ve seen you with my boys. Let me buy you a drink to celebrate.”

They walked into the inn where half the crew was assembled. “Join me for a drink to the newest father on our crew! Fred will have a child in the spring!”

         The men cheered and took turns slapping his back, shaking his hand and telling various funny and scary stories about being a father.

         When the men had settled down, Gwilym asked Fred for details. “Did you buy a farm with your money?”

         “Aye. I bought old Fane’s land now that his mind is gone and he’s livin’ with his daughter. Got a fair price for it too. We’re using some of th’money to fix up th’old farmhouse. It needs a new thatch and another layer of mud on th’walls. Heilin loves it. She’s fixing it up now for th’wain.”

         “That’s great Fred. You’ll make a success of it I’m sure. What will you plant this spring?”

“I’m plantin’ wheat. But I’ll get some cows and sheep too, for milk and wool. Heilin’s always busy so I’ll dig her a vegetable garden to tend. Umm… Gwilym…I’ve been meanin’ to ask you…”

         “If you can go home in time for the baby, and to plant your crops?”

         “Aye.”

         “No Fred.”

         Fred’s face dropped. “All right.”

         Gwilym smiled and waited for Fred to raise his eyes to look at him. “Why are tha smilin’, Gwilym?” His expression was that of a beaten cur.

         “Can you not think of why you’re obligated to stay until the end of the project?”

         “No. I thought it were goin’ pretty well. We are ahead of schedule. You got money for th’mosaic so we’re under budget. Everythin’ is bein’ built just th’way we planned. Tha don’t need me anymore.”

         “Did you forget what you asked me on the day you arrived in Salthouse?”

         Fred’s brow furrowed. Then his face cleared and a smile broke out to match Gwilym’s. “I owe you some of my pay! I took out th’whole season’s pay to buy th’fields. Aye! Here you go, Gwilym.”

Fred fished out a pouch and counted out a large sum of money. He handed this to Gwilym. “That’s too much, Fred. You only owe me wages from March to May. You’ve given me six month’s salary.”

         “Aye. But I tripled my money so it’s only fair you get back triple.”

         “No, Fred. The books won’t work out if you do that. I’ll take back only two months of your pay. Use the rest to buy something nice for your baby.”


To read the entire first draft in one shot, click here:

Government shutdown costs more money

I have a lunchtime exercise routine when I'm in Morristown that takes me up a nearby hill to an old Revolutionary War fort site. It offers good cardio workout and a splendid view from the top:

So I'm taking my walk yesterday and the gate is closed and adorned with a beautiful plastic banner that is adorning all National Parks this week. I saw the same banner on the Lincoln Memorial. Here it is:

How much money did it cost to print and distribute all of these banners? The government shutdown was supposed to save money but all I can see it that it's costing extra money and all these workers are going to get paid anyway. But that's not my main beef here.

I can understand that they get furloughed and cannot show up to work. But what right do they have in closing parks like this and the Lincoln Memorial? And the various memorials in D.C.? The workers are not needed there. I've been to the Lincoln Memorial and it is basically a big stone building with a statue inside. Why can we not walk around inside? What right do these non-workers have to prevent us from seeing them? Is this just the government trying to spite the citizens because they cannot reach a budget agrreement with the opposition party?

So being the typical Australian who cares little for authority, I walked around the barrier preventing me from getting my exercise and climbed to the top and back down again. Surprise, surprise, I managed to do this without the park workers, (who I've never seen all the years I've taken this walk by the way). When I arrived back at the barricade, there was some kind of uniformed officer waiting to talk to me. (Did I mention there was also a sign warning me of a $65 fine for trespassing on this National Park?)

I saw him from a distance and practiced in my head what I would say to him. My thoughts ran this way: This is a hill. I use it for exercise. You don't own it and you better not try to prevent me from walking up it because of your stupid government shutdown. I don't need any workers to help me climb up and down this hill.

The actual conversation went this way:
Officer: "You do know this park is closed, right?"
Me: "Yes, but this is my usual lunchtime exercise."
Officer: "Oh. Are there any more people up there?"
Me: "Yes. There's a wild Tea Party orgy going on!"
Actually that last line stayed in my head as I replied "No."

So what do we do? Allow the government to continue to spend us into bankruptcy? Default on our loans? No. It is time to make some serious cuts in government workers, and remaining workers' benefits and pensions. We need to bring some fiscal responsibility back to our government spending. So fire a quarter of the government workers and only hire back the good ones. That's what happened in the private sector and we are doing just fine.