Profit Bucket

I’m not that great with words.  If I need to understand something, I have to visualise it, then I understand … this is something I visualised a while back, it helped me out of my own sad hole and understand what difference I can make, and ways to help (With a bit of help from the lazy project manager, thank you Peter Taylor). 

So, this seems like the perfect place to start to share!  The profit bucket … I hope it helps you too.

If you’re in the business of delivering projects, the most important thing you do is the project.  It’s what pays the bills ….. A project is a one off event and you only get one shot at it!  One chance to deliver the best you can and make the most from it.  As a business, this is invariably the profit.  But how does it work?

I’ve been in many end of project reviews and the one thing that seems a common occurrence is that the profit isn’t as much as predicted..... Cue finger pointing ...  Blame the estimator, blame a department, blame someone, blame a mistake, we all make them …. some bigger than others …. But when you really look its not just one thing.  It's not that easy and obvious ....Or is it ?

Let’s look at a project and profit in the form of a bucket, with a couple of taps … 

THE PROJECT PROFIT BUCKET

Simple idea … you pour the projects turnover in and, during the course of the project you drain off the costs and simply open the profit tap at the end and out they come!  Yes, in an ideal world … but we don’t live in an ideal world.

There is also a hole in your bucket .. a hole that can’t be fully closed up.  Unless you're looking you don’t see it …. This is productivity.  And this is where the profits drain unnoticed.  The less productive, the bigger the hole and the more profit you lose.

So to protect your project profit, look at the productivity and a big source of this waste within a project is not in the production, because production only react to instructions …. It’s in the instructions and direction …. and these come from management ……

Poor instructions are a result of: quick thinking, not understanding, poor information and poor communication … Usually this is due to a lack of experience, structure and defined roles and responsibilities … and this stems from: poor planning, no reviewing or lack of forward thinking… Loss of profits are as much managements fault than anyone’s …  Even though we like to waste more time, be more unproductive, look to blame something else……Find the pharmakos, after all we're too important and good looking to be one of them (look it up)!

The good news? It’s easy to reduce the hole, once you understand where and how the hole occurs .... and generally, all it takes is self-awareness, humility, experience and forward thinking to reduce it .... Not reacting … But more on that another day.

I'd love to hear your views, experiences and comments and if you're interested in finding out more how this can help you, drop me a line.

Thanks for reading
​Simon