Better Control of Development Projects at Johnson Controls The Automotive Systems Group of Johnson Controls was having trouble controlling their product development programs with each project being managed differently, disagreements about who was responsible for what, projects failing because of rapid company growth, and new employees having trouble fitting into the culture. For a solution, they went to their most experienced and successful PMs and condensed their knowledge into four detailed procedures for managing projects. Because these procedures are now common to all projects, they can be used to train new employees, standardize practices, create a common language, tie together different company functions, create common experiences, act as implicit job descriptions, and create a positive overall project management culture. The first procedure is project approval for authorizing the expenditure of funds and use of resources. The sales department must first provide a set of product/market information, including financial data, project scope, critical dates, and engineering resource requirements before management will approve the project. Thus, projects are now scrutinized much more closely before work is started and money spentwhen more questions are asked and more people are involved, better decisions tend to be made. The second procedure is the statement of work, identifying agreements, and assumptions for the project. Here, both the customer and top management must sign off before product design work begins, thereby reducing misunderstandings regarding not only product specifications, prices, and milestones but also intangible product requirements, explicit exclusions, and generic performance targets. Maintaining this documentation over the life of the project has helped avoid problems caused by late product changes from the customer, particularly for 3 to 5 year projects where the personnel rotate off the project. Customers have, however, been slow to agree to this level of documentation because it limits their ability to change timing, prices, and specifications late in the program when they are more knowledgeable about their needs. The third procedure is the work breakdown structure, consisting of nine critical life cycle phases running from definition through production. Included in each of these nine phases are four key elements: the tasks, the timing of each task, the responsible individuals, and the meeting dates for simultaneous engineering (a formalized procedure at Johnson Controls). The fourth procedure is a set of management reviews, crucial to successful project completion. Both the content and timing of these reviews are specified in advance and progression to the next phase of a project cannot occur until senior management has approved the prespecified requirements, objectives, and quality criteria for that phase. The procedure also specifies questions that must be answered and work that must be reviewed by senior management. Through the use of these procedures, which are updated and improved with each new project experience, the learning that occurs in the organization is captured and made useful for future projects.

Questions a. Summarize the unique way Johnson achieved control over their projects. b. How did scope creep enter the projects in the past? Which procedure is now directed at controlling this effect? c. Which of the four procedures is probably most critical to successful projects? d. What is the term used in the chapter for the senior management review described in the fourth procedure?