Larry Traynor shares his experience of the complexities of managing international projects and recommends 12 golden rules for success

My first international assignment was in Cologne, Germany, working for Ford, managing international projects. I had to learn German, and went through the “cultural shock” of moving to a foreign country: feeling isolated, misunderstood, and just sad and depressed, even though I had friends around me. Getting through the language barrier is the beginning of breaking through the cultural barrier, and is, I believe, critical to success in working in and especially in managing international projects.

It is not always possible to speak every language and know every culture involved in multi-centre international projects, but the key point is to understand that each language group/culture has potentially fundamentally different ways of looking at the world and dealing with issues.

Unless one has experienced this insight into “cultural relativity” at first hand, and understood that each perspective is equally valid, one runs the risk of turning into the “ugly American”, believing and acting as if the world were an annexe of the USA. I am not talking just about Americans, of course – any dominant culture can be guilty of this.

The desire to become part of the culture is important both at work and socially. One should create and maintain a good work/social balance with colleagues on a project. The project manager can facilitate this by structuring group project events at outside venues, for instance, where teams from different countries can come together to focus on project issues, but also to share time outside work at meals and appropriate social events.

It is also crucial in my experience, regardless of how good the telecommunications facilities are, to regularly schedule face to face meetings with key project personnel. There is simply no substitute for personal contact, both professionally and socially in building project teams, getting them to work and communicate with one another, maintaining and improving their individual and group performance, and ensuring project success. The project manager must take the lead in this, and show willing to spend the extra time and money on this key ingredient to international project success.

‘Hard’ problems

Another source of complexity in international projects is differences between legal and regulatory regimes across different countries. One example from my recent experience occurred on a so-called “X-Border” project within a Swiss firm, where an existing system from its German arm was being integrated into the Swiss Head Office environment.

The company had outsourced all of its development work to a third party, but hadn’t given much thought to the practical consequences of this regarding development in such a X-Border environment by a third party. They were in the financial services industry and their customer data was subject to special conditions in each country’s Data Protection legislation. This presented the third party developers, and their company led project management with significant operational issues when the third party needed to access customer data in order to develop and test their applications.

In Germany, it turned out that it was totally illegal for the third party to deal with customer data directly in any form that made it even partially recognisable. They had to “scramble” large amounts of customer data in order to make it unrecognisable from the data protection point of view but still usable for development and testing. This cost an additional 2 million Euros, which was outside the budget of the project in question.

No-one knew if it was legal for the German third party developers to access Swiss customer data as part of the same project and if not, whether yet another 2 million Euros would have to be spent to scramble the data.

The matter was pressing, as there was only about 5 months to go for the first implementation and the third party developers were in full swing and required an answer immediately. The lawyers “swung into action” as only lawyers can do, and came back with an answer 3½ months later.

In the meantime, the firm had arranged for access to the Swiss data as if there were no data protection issues, hoping that the right answer would come back from the lawyers. This time the right answer came back, but in such situations there is never any guarantee that such risk taking will prove positive. If it hadn’t, the firm would have been liable for serious financial penalties, but if they had simply waited, they would have entirely missed the deadline for the first production implementation, which was a major corporate event and high on the list of the Board’s strategic priorities.

OODA: Observe, Orient, Decide, Act

An interesting framework for almost any complex activity requiring good decisions and the ability to learn quickly from the environment is John Boyd’s OODA “Loop”.

John Boyd was an aircraft designer and very successful jet fighter pilot. He flew the American F-86, which won 9 out of 10 dog-fight encounters with its rival Mig-15 despite being by all accounts an inferior aircraft.

Boyd pondered over this conundrum, and reviewed in his mind what he did in the cockpit during a dog-fight. He first observed, then oriented himself, planned for action and then acted. Boyd called this process OODA (observe, orient, decide and act). Critically, he performed this sequence over and over again, and presumably his counterpart in the Mig was doing the same thing.

He decided that the primary determinant to winning dogfights was not merely going through the loop better than the other fellow – it was doing so faster. In other words, speed of iteration beats quality of iteration.

So how could the F-86, an inferior aircraft, iterate faster than the Mig? It turns out that the F-86 had a hydraulic flight stick whereas the Mig-15 had a manual flight stick, which became increasingly difficult for the Mig pilot to operate as he became tired from having to push it constantly without hydraulic assistance.

Roger Sessions, a well known specialist in the pragmatic implementation of Enterprise Architectures, has called this “Boyd’s Law of Iteration”: “In analyzing complexity, fast iteration almost always produces better results than in-depth analysis.”

International project management environments tend to be extremely complex and are an ideal place to implement Boyd’s insights. In addition to speed of iteration, in his orientation phase, one of the key components to be taken into account in Boyd’s model is the “cultural conditions” of the observer. It is clear that our own cultural views colour our observation and hence directly affect our decision making process and resulting actions.

My own experience in international project management environments has confirmed this: going through the OODA Loop faster (with due consideration given to the cultural dimensions) in complex situations is preferable to a slower, more thoughtful and perhaps higher quality approach. For example, quickly producing an outline solution, even when you know it is incomplete and not totally accurate, and distributing it to all those whom you believe may be affected, is probably better than not producing anything and working until you know have an absolutely correct solution over a longer period of time. You will need several iterations in any case, and, in the meantime, you will most likely have identified other parties who may need to give input.

This type of behaviour is entirely pragmatic in projects (you must win the dog-fight!), but at the same time, it runs counter to our learned behaviour not to make mistakes. In some countries and companies, it is crucial not to be seen to be making mistakes of any kind, which is a great inhibitor to positive action. It has also been my experience that IT staff in particular are extremely loathe to act in such a fashion, preferring to never issue anything that isn’t perfectly complete. One must have the courage to press on through Boyd’s Loop, take the flak from those who miss the forest for the trees and correct things in successive passes through the Loop.

The Golden Rules for Managing International Projects

In conclusion, my 12 Golden Rules sum up the practical lessons I have learned over my 30 years on managing international projects successfully:

1. Don’t be an “Ugly American”: make an effort to walk in the shoes of those affected by your project.
2. Encourage face to face meetings for key project leaders and staff in alternating venues in the different countries involved in the international project.
3. Work out a language strategy that suits the majority of project members.
4. Make an effort to participate in social events of the countries you are working in, and try to schedule a few such events for the key project team members over the course of the project.
5. Always be polite. Remember that you are a guest in the country you are working in, and your behaviour will be taken as representative of your own nationality as well as of your person.
6. Adjust your professional standards to the culture of the company you are working for, without damaging your integrity. Standards are fine, but don’t attempt to enforce them too rigidly or in a manner you are accustomed to that simply will not work for a particular client.
7. When confronted with new dimensions of complexity, consider using John Boyd’s OODA Loop approach: press on quickly, even though you know your first attempt is not complete and not totally accurate. Make corrections in the successive passes through the Loop.
8. Remember that project management is all about information and communication. Information becomes harder to get in international projects and communication is made more difficult by the linguistic and cultural differences. No IT package will solve this – there is simply no substitute for keen soft human skills in this area. Don’t get me wrong: I am not an IT Luddite, but the emphasis has to be on sound human communication skills with technology as a support.
9. Virtual Project Teams can become a reality if you have something like Microsoft Project EPM installed, which allows sharing of plans over a shared server and over the internet. The technology alone is not enough, however, unless you have the soft skills described earlier and the company involved has provided proper training for their staff and is at a fairly advanced stage of sophistication (as judged by the PMI stages of maturity, for example).
10. Find out who has the best intra-company network among your project staff and bind them to yourself with hoops of gold! This person will hold the key to solving all the end-to-end problems which are bound to arise during the course of the project.
11. Remember that you are there to do a particular job, but that there will usually be an implicit agenda and terms of reference that will never be written down: you are there to make your boss look good!
12. The best tools are common sense, flexibility, a positive attitude, and a commitment to the best motto for every Project Manager: Execution, Delivery, Results!

About the author: Larry Traynor is a Board level senior executive interim manager and management consultant with 38 years’ project experience, including some 30 years of managing international projects. Larry’s career began with the APOLLO Moon Project in 1968 where, as a programmer and analyst, he designed and tested real-time software for the project’s front end telecommunications. After applying his skills in the emerging real-time technology to the finance and retail sectors, he took on his first international assignment working for Ford in Germany as an IBM Database and Network Specialist with European-wide remit.

Energy is by definition an exciting thing. We use that word not only to describe the motor of our everyday life, the very essence of how our world works, but also to define spirit, character, even a conversation. It’s too bad if we happen to fail in comprehending the latter (that’s life), but if we also fail to understand energy as the primary and complex matter and industry that it is, then we are bound for catastrophe. As simple as it may sound, this is what has been happening in the past 10 years in the energy industry worldwide: the idea that business can apply to energy like any other, that its experts are such even if by unverified proclamation and that if we end up paying a lot for renewables it is because it’s just an unprofitable idea, at least for now.

As an executive with thirty years of managerial experience in multinational companies, working in the energy field for the last ten of my career has been a welcomed challenge. I believe in progress, in sustainable and profitable solutions, in the future. But as energy business scandals unfold in the news in these last days, I am prone to bitterness to say the least – it seems as if though we had the solutions ready, but we kept ignoring the problems. And now all hell is breaking loose.

Even if we are currently stuck in the recurring paradigm for which progress and innovation take a social and economic toll that hopefully will pass once we are forced with no other possible choice, anyone who works in the energy business knows (at least deep down) that it’s not the industry that is at risk, but rather the mindset that is behind it. Oil keeps reigning but it won’t forever. The sun and its daily irradiation of 12.000 times the energy needed by the whole planet are bound to be more reliable, for example. If we haven’t yet found a way to exploit that, we will.

But only if we adopt a renewable business mindset as well. Historic energy companies are falling in front of our eyes – such as self-styled world leader solar plants developers, gas producers, coal miners and so on, that until “yesterday” were considered as milestones of our society, compasses for anyone, from institutional investors to common savers, willing to navigate the meanders of technology and investments. And so we are bewildered. We read of financial analyses, interviews, briefs. But it appears that no one is actually describing the simple truth: companies are made of people, and if people don’t understand the game they’re playing, they will lose. You can’t fit a square through a circle hole, despite all the money you may have or be willing to lose in trying.

Speaking of money, the knowledge you may have of it will do you nothing in the renewable energies market if you don’t have a deep awareness of how it works. The risk of turning it into an economic bubble was obvious early on, but it was deemed a problem of tomorrow. Incentives in many countries paved the way for billions in investments, until national agencies closed the faucets and wished investors a good (sunny) day. In Italy for example, solar energy accounts for 18 GW of installed power, covering some 7% of the Italian energy need. It’s a lot less than what we could do, but nonetheless people have stopped to take interest or have even started to complain heavily of prices.

I doubt most of my Italian fellow citizens know that their energy bill might have hidden costs that account to approx. 0.40€ per quarter for them, but may mean a total of much over 8M€ for that utility in the business. They are barking at the wrong tree.

But not all are blind. Germany has done an amazing job in simply looking at the big picture, the long run. In sustaining the energy growth at all levels, from residential to industrial, it is perfectly in line with its intent to get rid of nuclear power within the next 30 years. On the other side of the revolution we have Italy for example, a champion of bureaucracy that has attracted developers and investors from all over the world thanks to the quality of its sun and the abundance of its incentives (included some of those ‘stars’ recalled above, who set up in North-East Italy one of the largest solar plants in the world with a power of 70 MW), and managed to fail them all.

I understand that being that thing that runs through copper cables (electric energy), or that hot fluid that flows through pipes (thermic energy) to name a few, it is hard to grasp. An oil barrel is much more reliable for our brains, you can touch it, and you can sell it by the gallon, which is still a much easier measure than a kilo-watt-hour. But that is no excuse for linking the price plunge of oil to the insecurity of a renewable future. The recipe for success here is to account for all aspects of the energy industry, not just one (money). Investment, ROI, environment, development, growth, wealth, economic stability and most of all – a long term mindset, able to adapt and see beyond the easy money of an easy investment. There is no room for neither anymore.

I had proof of all this when I was called for a consultancy about an international major project concerning a solar plant that had three different countries involved as parties, and that wasn’t performing as planned making banks and investors extremely anxious (not to say raging). I was expected to spend at least two days examining the plant and the business behind it, which instead I managed to do in no more than half an hour. There wasn’t any dark secret to be unveiled, no inexplicable economic loop that it had fallen in, no conjecture of lack of sun and poor panel quality. The simple truth was that there had been made simple mistakes. People who knew and understood almost nothing about energy decided to become energy makers. And that is why we are now left with “the result of cheap money and excessive financialization of the economy”, as Bezek said recently in one of his articles. I was never called by those investors again, for them what I stated was just too simple and too easy to be true!

My hope is that we will stop thinking just until the next bubble, the next scandal, the next problem. Great things are happening right now with renewables, like the startup Watly who doesn’t build panels or solar plants, but cleans water with the energy of solar panels, just to name one. The technology is ever-growing, and nevertheless amazing as the first day we realized we could harvest the power of the sun. I urge any and all managers that do not ‘understand’ energy and are after the great money and great career to stay away from the energy industry.

Not because it wouldn’t do it for them, but because they wouldn’t do it for her.

About the author: Dr. Liborio F. Nanni

An accomplished, multi-lingual and growth focused Senior Executive with a proven track record of international large-scale ($300M+ USD) contract successes leading General Management, Change Management, Business Development, Sales, and Operations Teams within various sectors of industry such as high-tech field with late focus on the Power and Energy, Renewable Energy, and Utilities sectors with significant exposure to the operating environments of US multinational corporations and the effective management of dispersed multicultural and multifunctional teams within multi-country environments.

A mature and credible leader with long P&L management experience, strong negotiations and market penetration skills, and highly developed customer facing skills across the entire value chain: from OEMs to key ends users, from distributors to EPC including responsibility for multi-million euro budgets. Equipped with a hands-on mind-set and a Group mind-set; employs excellent presentation, demonstrated ability to communicate and C-Level stakeholder management skills, together with whilst developing teams and individuals using a mentoring philosophy to exceed the business objectives. View Dr. Liborio F. Nanni’s short bio

International Management: A sticky wicket? Some facts about the global economic climate

Not a reference to the England cricket team’s difficulties on the subcontinent but a term economists use when inflation is resistant to change. Should we then be overly alarmed to see inflation stuck at 2.7% for three months straight in the UK? Perhaps not, but against this backdrop it is little surprise that retail sales were weak over Christmas and the high street is struggling. Conditions for US households are more benign and there is increasing evidence that the housing market has finally turned a corner in the world’s largest economy. The pretender to this crown, China, is also showing signs of improvement. Dampening the New Year cheer in the global economy is the news that the previously resilient Germany seems to have succumbed to the downturn in the Eurozone. How are the US going to repay their debt of $16 trillion and increasing daily?

UK retail sales fell over Christmas

December can be a make-or-break month for retailers, so the “official” data last week were keenly anticipated. In the end, they were disappointing but not catastrophic. The value of sales fell 0.1%m/m, pulling the y/y growth rate down to just 0.7%. If we strip out price increases and focus on volumes (i.e. the quantity of stuff we bought, rather than the amount we spent), the y/y growth rate was just 0.3%. With the exception of 2010, when the “Big Freeze” hit, that represents the weakest December since 1998. When you put it like that, the disappointing news that we will be losing some well-known retailers from the high street does not look so surprising. Also, what about the big drop in net profit for these retailers that will impact on the UK Government revenues!

UK inflation unchanged but the squeeze on households continues. Consumer prices rose 2.7%y/y in December, the same rate as in November and October. The pressure on inflation is being caused by utility prices (gas prices rose 5.2%y/y) and food prices (up 3.9%y/y) and with more price rises on the way throughout 2013/14 and beyond. There was some respite on the petrol forecourt, however, where pump prices fell very slightly. Inflation therefore remains higher than income growth, with average weekly earnings rising just 1.8% over the year to October. Against that backdrop, 2013 will be another difficult year for retailers.

Inflation less of a headwind across the Atlantic

Conversely, US CPI inflation edged down to 1.7%y/y in December, whilst the core measure that excludes ood and energy was stable at 1.9%. Inflation averaged 2.1% last year, comfortably below 3.2% in 2011 and the 10yr average of 2.5%. Risks that poor harvest yields and tensions in the Middle East would push commodity prices higher failed to materialise (they will rise in 2013/14). This will have been a relief for households who seem to have been more exuberant over Christmas. Retail sales were up 4.7%y/y in volume terms in December – a stark contrast with the UK. The net profit, is there any?

A busy end to 2012 for America’s bricklayers. New housing starts were up 12%m/m in December to an annualised 954,000 – the highest level since June 2008. For the year as a whole the increase was even more striking: a total of 871,000 houses were started, 28% more than in 2011. Along with a declining supply of repossessed homes, modest support from rising employment and steadily rising prices, it looks as if the US housing market finally turned a corner last year. More unemployment on its way!

Germany dragged into the mire

There was evidence that economic weakness in the Eurozone periphery is spreading to the core, as German GDP contracted (0.5%q/q) at the end of 2012. For the year as a whole Germany grew by just 0.7%, down from 3% in 2011, partly due to a slowdown in export growth. Things may get worse before they get better. Germany’s central bank cut its GDP growth projections to just 0.4% in 2013. Certainly this is an economy that is highly sensitive to the health of its trading partners. Ominously, almost 40% of German exports head to neighbouring countries in the Eurozone

Eurozone inflation steady

Inflation was unchanged at 2.2%y/y in December. The ECB sees inflation dropping below its 2% target during the course of 2013, given weak economic activity and high unemployment. This will take some pressure off consumers’ disposable income but will be far from sufficient to achieve a recovery in the Eurozone. Indeed it is likely that conversations will again remain firmly centered on the Eurozone crisis at the Davos meeting in Switzerland this week. The Eurozone is still in deep trouble!

China re-accelerates, but the true test still to come

China’s economy grew 7.9%y/y in Q4, bringing an end to the growth slowdown that had lasted almost two years. China has achieved this by spending more on infrastructure – the government’s favourite tool for stimulating growth. The true test of China’s new leadership will be rebalancing the economy towards consumer spending. So far, it has merely talked-the-talk on reform. In this context there is some good news. Disposable income growth is running at almost 13%y/y for city dwellers, well above average.

The USA has still major issues across many sectors. Plus, borrowing are $16 trillion and growing daily! When will it end?

What do you think about this?

Why do politicians/bankers/lenders ignore history? And yet history repeats itself several times because these people do not read! People need to read `The Rise and Fall of the Roman Empire` and then perhaps they will learn how to avoid repeating history.

The Credit Crunch of AD 33 Repeats itself time and time again!

What with the Bank of England pushing £375+ billion and the USA Federal Reserve $1+ trillion into their countries respective banking systems, readers may be interested to learn of the following from `Banking & Business in the Roman World`:

In AD 33 the lack of cash continued to become increasingly serious (where have we read this before many times?). To remedy the situation, through the intermediary of `ad hoc` financial offices directed by Senators, the Emperor himself offered interest-free loans amounting to an overall sum of 100,000,000* sesterces from his personal fortune for the duration of three years. The borrowers were required to offer security in the form of real estate or buildings. In this way they were not forced to divest themselves of their patrimony in order to pay off their debts. Fides, that is to say confidence, returned, and the situation was retrieved for a short time.

We live in a global trading environment of which there are so many players chasing very few opportunities that it is driving down prices globally and still people do not wish to buy!

Plus, the banks globally are still stashing cash at the highest levels ever recorded, why? We all know why, don`t we! Will we see a run on the banks soon?

The Euro currency will continue to suffer in the hands of Greece, Portugal, Spain, Italy and Ireland followed by France who are `all` in `deep` financial difficulty as first stated in January 2008. Who will leave the euro currency first? Then who will follow? What future has the Euro?

What are your plans for your future to be successful?

About the author: Colin is a former successful Managing Director and former Group Chairman of the Academy for Chief Executive, Non-Executive Director and Mentor – RFU Leadership Academy, helping companies raise their `bottom-line` and `increase cashflow`. Author of several publications, research reports, guides, business and educational models on CD-ROM/Software/PDF and over 400 articles published on business and educational subjects worldwide. Plus, International Speaker/Visiting University Professor.