answer the case study

"Hamburgen, hot dogs, and chickes sandwiches all servod with poeate chipt. trice inciuses mass ma. ExHIBIT 2 Cost and Pricing Data. Kathrayn summarized cost data and the anticipated price On Wednenday of neat week, Kathrayn had scheduled a for these menu items (Extubit 2). Because of the perishable na- meeting with the event promoter. The purpose of the mecting tare of the food and the distance of the event from CRC's other was to get a count on the number of tickets sold to date. Based on restaurants, any unused food would need to be discarded or per- this information and a more current weather forecast, Kathrays haps donated to local food shelters. Furthermore, given the spe-. would then need to quickly place the order for the hamburger cial nature of the event, Kathrayn did sot anticipate significant meat, hot dogs, and potato chips late Wedaesday afternooe. shortage costs beyood the lost profits should they run out of The most pressing iscue was whether so go with the limited one or more menu items. Another vendor was responsible for or broad menu. If the broad menu was selected, how much chicken providing drink services. number of other expenses. First, it was anticipated that the booth the quantities of hambers for a fisther analyze the situation reganding was to be provided by the event promoter. Finally, in consideration for being the event's sole food ven- the updated ticket sales informabion and weather forecast. dor, CRC was required to supply a VIP tent for the musicians with food at no cost. Based on the number of acts, Kathrayn estimated that the musicians and their entourages would consatne in Questions the neighbothood of 150 to 250 hamburgers, with all quantities 1. Does serving as the food vendor for the Crystal Coast Music in this range equally likely. 2. What are the sources of uncertainty facing Kathrayn Regaa? Can anything be done to belp mitigate the ancertainty? The Decision 3. Woeld you recommend Kathrayna go with the limited or It was Friday afternoon, May 26. Kathrayn had just checked the Accuweather Web site (www.accuweather.com) for the fifth time today. The weather forecast was for clear the day of the event with thunderstorms the following two days. If Kathrayn decided to go with the brosd menu option, she would need to broad menu? How much of each food item wonld you recplace the order for the chicken Monday momingommend Kathrayn onder? (Hiat: you might consider simue arty detrithes the dangers of our faster, more volatile, and more global markets risk, but lack of change seable changing their structares and responses. Change involves more system to cope with changerantees falling behind faster and faster. Resilience-the ability of a more efficiently are all compers is the solution. Being more agile, flexible, and excuting faster and more cincieatly are all components of resilience, but theie must be ingrained in the organization. which takes time and conscious effort. Building Resitiency" D. Burba "In the past, project management was all about efficiency In the 21 st century, competitive disruption is business as usual. and optimizing each process," he says. "Today, it's more about Just look at the airline industry: In less than 15 years, four fletibility and agility, because market trends change during profupstart "super-connector" airlines-Emirates, Qatar, Etihad and ect cycles." Under such circumstances, change management at Turkish-have surpassed the reach of formerly dominant car-. the portiolio level is critical. "I can look across the portfolio, and riers based in Europe. And they're beginning to move into the - . there's a lot more outside influcnce on it than there ased to be," traditional turf of U.S.-based airlines. How to respond to aggressive competitors and navigate the portfolio, you're going lo spend a lot of time managing chaos." volatile markets quickly and successfully is the crux of organi- highly developed culture of agility are more effective at organizational agility. No longer a buzz-word, agility is a must-have zational change. Sixty-seven perceat are effective at anticipating for project success in rapidly evolving sectors-which these changes in the external environment, compared to just 10 percent days is most. "To be prepared for the future, yoa need both a culture and percent of them can effectively implement responsive or adaptive an organizational structure that provide the flexibility needed in strategies to the changing environment, compared to 6 percent of a changeable environment," says Jorge Alberto Prez Torres, organizations with an underdeveloped culture of agility. PMP, organization deputy director at insurance firm Allianz, Mastering both change and risk management boils down Mexico City, Mexico. "The word 'resilience'-the ability of a to three capabilities: the ability to menitor and respond to the system to cope with change-fits very well in this case." extereal environment, the ability to standardize change and risk PMI's 2015 Pulse of the Profession , Capturing she management practices throughout the organization, and the Value of Project Management Through Organizational Agility ability to translate knowledge gained through these practices in-depth report found that 75 percent of organizations with a into a better project portfolio. highly developed culture of agility are able to quickly respond to market conditions, compared to 12 percent of organizations with Preventing Peril an underdeveloped culture of agility. The contrast was similar with customer satisfaction ratings How all this drives increased agality is simple: It prepares proj(85 percent compared to 23 percent). Yet cultivating organizational agility isn't easy. Organj- idly changing environments. In a tightly regulated industry such zations aren't monoliths; they're made up of people, and get- as banking, work on a deliverable often has to be doae before ting people to change their habits of mind and behavior takes the exact nature of upeoming regalations are known, says time and effort. When organizations create a culture of agility Mare Burlereaux, PMI-ACP, PMII-RMP. PMP. PgMP, business that enables projects and programs-their most strategic ini- implementation manager, HSBC Private Bank, Gencva, Swittiatives-to be completed faster and more efficiently than ever zerland. Complicating matters, the project team often has to before, they are better positioned to thrive in uncertain economic take into account regulations by both local and pan-Earopean conditions. According to the Pulse report, organizations can authorities, accomplish this by establishing a five-part, sclf-reinforcing Even when the pressure comes from within-decreasing framework consisting of supportive culture, strategic flexibility. time to market, for example-the importance of risk management collective leadership, capable people and adaptive process. But the real challenge for organizations looking to increase ensure delivery without putting the company at risk," says Mr. their agility is figuring out how to ingrain these capabilities Burlereaux. "With too moch pressare from management, there 10 deeply in the project culture that they become second na-_. is a strong tendency to minimize risk impsct. We then need a ture. There's no getting around the time and conscioas effort strong operational risk manager who is able to be vocal." this requires. Organizational agility also requires all project teams to work from the same playbook. The 2015 Pulse report found Prepared for the Storm that organizations with highly developed cultures of agilThe difference between managing projects, programs and port- ity focus on project management training and development changes and compared to 10 years ago is the speed at which to 13 percent of organizations with underdeveloped cultures change and risk management capabilities have to be used, says of agility). The new 2015 study notes that organizations with Herb Payan, PMP, senior vice president, digital strategies, Sony highly developed cultures of agility succeed by embedding Music, Fort Lauderdale, Florida, USA. foundational practices across the buxiness, including aligning business capabilities to strategy and integrating the voice of the customer into projects. 'Reprinted from PM Network with permission, Copyright Project For Mr. Burlereaux, having standardized practices such Management Institute Ine. as fully documenting projects has proven the kcy to managing initiatives in an industry-banking - that hasn't exactly lacked essential checks and balances can project and program managers volatility and uncertainty in recent years. make their organizations more agile, he says. "The main advantage of having a well-documented port- But the onus is also on project managers to create an folio of projects was to be able to keep, shorten or stop initia- environment that fosters the ability to quickly make changes tives, depending on simple criteria like cost to complete, benefits while taking the big picture into account. To implement orgaawaited versus benefits realized, or 'do or die' projects," he says. nizational agility, "the number one most important thing is "An updated projects portfolio database is essential to make on- communication," says Becky Walker, PMP, government analyst the-spot decisions to either maximize the benefits or make sure at the Florida Department of Revenue, Tampa, Florida, USA. we keep the bare minimum in the portfolio in case of a stormy "In order for us to be our most efficient, we have to be aligned environment." with the organizational strategy and have the resources to Structural Evolution quickly respond to external changes," Whether there's a market meltdown or surging competitor, the their knowledge-both of their own organization's goals and ability to sail through the storm successfully requires everyone capabilities, and also of industry trends and market dynamics. from the executive suite on down to be on board. If only a few. And when the time comes, they need to be able to blend strategy, superstars at an organization excel in change or risk management, goals and reality to make the right decision quickly. for example, opportunities will be missed. The ability to adjust on a day-to-day basis to new market For example, Mr. Torres notes that organizations that rigor- challenges while keeping an organization's strategic goals in ously follow a yearly budget struggle with agility, because they mind is crucial, says Ms. Walker. "When challenges emerge, are shackled to a fixed amount of money that doesn't change as you have to ask yourself, 'What's the problem, and how can I the project advances. solve it while still meeting my own performance measures and "Having the intention to be agile is not enough if the way strategic goals?" we are organized is not profoundly changed in terms of policies, Finally, she notes that assessing and calibrating strategic procedures, team structures, empowerment and trust," he says. goals quarterly or annually isn't frequent enough in the current At Sony Music, that has meant flattening the organization business environment. Organizations must have the ability make so that everyone's voice is equal. That allows ideas, rather than changes whenever challenges emerge. That requires everyone titles, to drive the organization's culture. in the organization, particularly at the top, to acknowledge that "The people with the everyday workload, they know where hewing to the status quo in a dynamic environment won't work. the problems are. We have to listen to them," says Mr. Payan. When they do, they'll see the benefits where they matter "We have to go from, 'If my title is X, then I should have the most-on the bottom line. The Pulse study found that increased answers,' to 'My job is to make sure the right solutions are im- organizational agility resulted in faster responses to changing plemented." market conditions, better organizational efficiency, improved The organization also has embraced an ethos of "fail and customer satisfaction and greater business results. At a time fail fast." Rather than investing a great deal of time and effort when many organizations are treading water, those are powerful in developing a prototype, they put out an imperfect model, get reasons to start thinking-and acting - differently. feedback and adjust. Identifying mistakes, he says, should be both accepted and rewarded, an attitude that he acknowledges Questions requires a shift in mindset by typically risk-averse senior man- 1. Why do managers perceive organizational change, and the agers. The idea is that by giving teams the freedom to take more agile project approaches, the organization is growing its overall agility to change quickly and easily, as increasing risks? agility: It can get products to market faster and adjust them on 2. The article emphasizes that increasing the organizathe fly, avoiding long, costly development cycles. In a dynamic tion's agility, although difficult, isn't the most challenging market, this can make the difference between beating a compettask. What is? itor and being left behind. 3. The first two of the three capabilities for mastering change But the road to agility can be bumpy. "Many managers don't and risk management seem sufficient. Why the third? want to deal with agility because [they think] it is less govern- 4. What's the problem with pressure from management to able and implies more freedom, and thus risk, for their teams," minimize risk impacts-shouldn't they be worried about Mr. Torres says. Only by trusting team members to deliver using risks too? "Hamburgen, hot dogs, and chickes sandwiches all servod with poeate chipt. trice inciuses mass ma. ExHIBIT 2 Cost and Pricing Data. Kathrayn summarized cost data and the anticipated price On Wednenday of neat week, Kathrayn had scheduled a for these menu items (Extubit 2). Because of the perishable na- meeting with the event promoter. The purpose of the mecting tare of the food and the distance of the event from CRC's other was to get a count on the number of tickets sold to date. Based on restaurants, any unused food would need to be discarded or per- this information and a more current weather forecast, Kathrays haps donated to local food shelters. Furthermore, given the spe-. would then need to quickly place the order for the hamburger cial nature of the event, Kathrayn did sot anticipate significant meat, hot dogs, and potato chips late Wedaesday afternooe. shortage costs beyood the lost profits should they run out of The most pressing iscue was whether so go with the limited one or more menu items. Another vendor was responsible for or broad menu. If the broad menu was selected, how much chicken providing drink services. number of other expenses. First, it was anticipated that the booth the quantities of hambers for a fisther analyze the situation reganding was to be provided by the event promoter. Finally, in consideration for being the event's sole food ven- the updated ticket sales informabion and weather forecast. dor, CRC was required to supply a VIP tent for the musicians with food at no cost. Based on the number of acts, Kathrayn estimated that the musicians and their entourages would consatne in Questions the neighbothood of 150 to 250 hamburgers, with all quantities 1. Does serving as the food vendor for the Crystal Coast Music in this range equally likely. 2. What are the sources of uncertainty facing Kathrayn Regaa? Can anything be done to belp mitigate the ancertainty? The Decision 3. Woeld you recommend Kathrayna go with the limited or It was Friday afternoon, May 26. Kathrayn had just checked the Accuweather Web site (www.accuweather.com) for the fifth time today. The weather forecast was for clear the day of the event with thunderstorms the following two days. If Kathrayn decided to go with the brosd menu option, she would need to broad menu? How much of each food item wonld you recplace the order for the chicken Monday momingommend Kathrayn onder? (Hiat: you might consider simue arty detrithes the dangers of our faster, more volatile, and more global markets risk, but lack of change seable changing their structares and responses. Change involves more system to cope with changerantees falling behind faster and faster. Resilience-the ability of a more efficiently are all compers is the solution. Being more agile, flexible, and excuting faster and more cincieatly are all components of resilience, but theie must be ingrained in the organization. which takes time and conscious effort. Building Resitiency" D. Burba "In the past, project management was all about efficiency In the 21 st century, competitive disruption is business as usual. and optimizing each process," he says. "Today, it's more about Just look at the airline industry: In less than 15 years, four fletibility and agility, because market trends change during profupstart "super-connector" airlines-Emirates, Qatar, Etihad and ect cycles." Under such circumstances, change management at Turkish-have surpassed the reach of formerly dominant car-. the portiolio level is critical. "I can look across the portfolio, and riers based in Europe. And they're beginning to move into the - . there's a lot more outside influcnce on it than there ased to be," traditional turf of U.S.-based airlines. How to respond to aggressive competitors and navigate the portfolio, you're going lo spend a lot of time managing chaos." volatile markets quickly and successfully is the crux of organi- highly developed culture of agility are more effective at organizational agility. No longer a buzz-word, agility is a must-have zational change. Sixty-seven perceat are effective at anticipating for project success in rapidly evolving sectors-which these changes in the external environment, compared to just 10 percent days is most. "To be prepared for the future, yoa need both a culture and percent of them can effectively implement responsive or adaptive an organizational structure that provide the flexibility needed in strategies to the changing environment, compared to 6 percent of a changeable environment," says Jorge Alberto Prez Torres, organizations with an underdeveloped culture of agility. PMP, organization deputy director at insurance firm Allianz, Mastering both change and risk management boils down Mexico City, Mexico. "The word 'resilience'-the ability of a to three capabilities: the ability to menitor and respond to the system to cope with change-fits very well in this case." extereal environment, the ability to standardize change and risk PMI's 2015 Pulse of the Profession , Capturing she management practices throughout the organization, and the Value of Project Management Through Organizational Agility ability to translate knowledge gained through these practices in-depth report found that 75 percent of organizations with a into a better project portfolio. highly developed culture of agility are able to quickly respond to market conditions, compared to 12 percent of organizations with Preventing Peril an underdeveloped culture of agility. The contrast was similar with customer satisfaction ratings How all this drives increased agality is simple: It prepares proj(85 percent compared to 23 percent). Yet cultivating organizational agility isn't easy. Organj- idly changing environments. In a tightly regulated industry such zations aren't monoliths; they're made up of people, and get- as banking, work on a deliverable often has to be doae before ting people to change their habits of mind and behavior takes the exact nature of upeoming regalations are known, says time and effort. When organizations create a culture of agility Mare Burlereaux, PMI-ACP, PMII-RMP. PMP. PgMP, business that enables projects and programs-their most strategic ini- implementation manager, HSBC Private Bank, Gencva, Swittiatives-to be completed faster and more efficiently than ever zerland. Complicating matters, the project team often has to before, they are better positioned to thrive in uncertain economic take into account regulations by both local and pan-Earopean conditions. According to the Pulse report, organizations can authorities, accomplish this by establishing a five-part, sclf-reinforcing Even when the pressure comes from within-decreasing framework consisting of supportive culture, strategic flexibility. time to market, for example-the importance of risk management collective leadership, capable people and adaptive process. But the real challenge for organizations looking to increase ensure delivery without putting the company at risk," says Mr. their agility is figuring out how to ingrain these capabilities Burlereaux. "With too moch pressare from management, there 10 deeply in the project culture that they become second na-_. is a strong tendency to minimize risk impsct. We then need a ture. There's no getting around the time and conscioas effort strong operational risk manager who is able to be vocal." this requires. Organizational agility also requires all project teams to work from the same playbook. The 2015 Pulse report found Prepared for the Storm that organizations with highly developed cultures of agilThe difference between managing projects, programs and port- ity focus on project management training and development changes and compared to 10 years ago is the speed at which to 13 percent of organizations with underdeveloped cultures change and risk management capabilities have to be used, says of agility). The new 2015 study notes that organizations with Herb Payan, PMP, senior vice president, digital strategies, Sony highly developed cultures of agility succeed by embedding Music, Fort Lauderdale, Florida, USA. foundational practices across the buxiness, including aligning business capabilities to strategy and integrating the voice of the customer into projects. 'Reprinted from PM Network with permission, Copyright Project For Mr. Burlereaux, having standardized practices such Management Institute Ine. as fully documenting projects has proven the kcy to managing initiatives in an industry-banking - that hasn't exactly lacked essential checks and balances can project and program managers volatility and uncertainty in recent years. make their organizations more agile, he says. "The main advantage of having a well-documented port- But the onus is also on project managers to create an folio of projects was to be able to keep, shorten or stop initia- environment that fosters the ability to quickly make changes tives, depending on simple criteria like cost to complete, benefits while taking the big picture into account. To implement orgaawaited versus benefits realized, or 'do or die' projects," he says. nizational agility, "the number one most important thing is "An updated projects portfolio database is essential to make on- communication," says Becky Walker, PMP, government analyst the-spot decisions to either maximize the benefits or make sure at the Florida Department of Revenue, Tampa, Florida, USA. we keep the bare minimum in the portfolio in case of a stormy "In order for us to be our most efficient, we have to be aligned environment." with the organizational strategy and have the resources to Structural Evolution quickly respond to external changes," Whether there's a market meltdown or surging competitor, the their knowledge-both of their own organization's goals and ability to sail through the storm successfully requires everyone capabilities, and also of industry trends and market dynamics. from the executive suite on down to be on board. If only a few. And when the time comes, they need to be able to blend strategy, superstars at an organization excel in change or risk management, goals and reality to make the right decision quickly. for example, opportunities will be missed. The ability to adjust on a day-to-day basis to new market For example, Mr. Torres notes that organizations that rigor- challenges while keeping an organization's strategic goals in ously follow a yearly budget struggle with agility, because they mind is crucial, says Ms. Walker. "When challenges emerge, are shackled to a fixed amount of money that doesn't change as you have to ask yourself, 'What's the problem, and how can I the project advances. solve it while still meeting my own performance measures and "Having the intention to be agile is not enough if the way strategic goals?" we are organized is not profoundly changed in terms of policies, Finally, she notes that assessing and calibrating strategic procedures, team structures, empowerment and trust," he says. goals quarterly or annually isn't frequent enough in the current At Sony Music, that has meant flattening the organization business environment. Organizations must have the ability make so that everyone's voice is equal. That allows ideas, rather than changes whenever challenges emerge. That requires everyone titles, to drive the organization's culture. in the organization, particularly at the top, to acknowledge that "The people with the everyday workload, they know where hewing to the status quo in a dynamic environment won't work. the problems are. We have to listen to them," says Mr. Payan. When they do, they'll see the benefits where they matter "We have to go from, 'If my title is X, then I should have the most-on the bottom line. The Pulse study found that increased answers,' to 'My job is to make sure the right solutions are im- organizational agility resulted in faster responses to changing plemented." market conditions, better organizational efficiency, improved The organization also has embraced an ethos of "fail and customer satisfaction and greater business results. At a time fail fast." Rather than investing a great deal of time and effort when many organizations are treading water, those are powerful in developing a prototype, they put out an imperfect model, get reasons to start thinking-and acting - differently. feedback and adjust. Identifying mistakes, he says, should be both accepted and rewarded, an attitude that he acknowledges Questions requires a shift in mindset by typically risk-averse senior man- 1. Why do managers perceive organizational change, and the agers. The idea is that by giving teams the freedom to take more agile project approaches, the organization is growing its overall agility to change quickly and easily, as increasing risks? agility: It can get products to market faster and adjust them on 2. The article emphasizes that increasing the organizathe fly, avoiding long, costly development cycles. In a dynamic tion's agility, although difficult, isn't the most challenging market, this can make the difference between beating a compettask. What is? itor and being left behind. 3. The first two of the three capabilities for mastering change But the road to agility can be bumpy. "Many managers don't and risk management seem sufficient. Why the third? want to deal with agility because [they think] it is less govern- 4. What's the problem with pressure from management to able and implies more freedom, and thus risk, for their teams," minimize risk impacts-shouldn't they be worried about Mr. Torres says. Only by trusting team members to deliver using risks too