Olaf, the CEO of Wireless Telecom Company, has quite the situation on his hands.

The Maximum
Megahertz Project has fallen behind schedule and the project team is now asking for more money, as well
as a six-month extension for the project. He is faced with the decision to invest more money into the
struggling project or terminate the project and save face. If not handled properly he could lose talented
employees and also have yet another unfinished project on his hands. Now, this is not the first time Olaf
has encountered this situation. Within the past five years there were three other projects that failed to
see completion. The high costs of these unfinished projects and the lack of results are unnecessary and
avoidable. In order to address these reoccurring issues, the company needs to develop a plan of action
for the future that will allow them to better stay within their budget and allotted time constraints. Before
the plan is mapped out, we need to examine several issues that Olaf has identified:•We need to develop
a process that will monitor the project and alert us earlier on when a project begins to lag behind
significantly.•In the future, how will we terminate the project prematurely without discouraging or
embarrassing the project manager and team involved?•We need to be able to manage the costs of
projects and keep them within our budget.•We need to more effectively manage the use of our
resources.•We must stay within our allotted timeframe and meet project schedule deadlines (Gray 530).

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Maximum Megaherzt Case Study

Magali Ekome Ndong MGT 4330 Dr. Margaret Shipley Tuesday November 6th 2012 Case#4 Maximum
Megahertz Project Maximum Megahertz Olaf Gundersen, CEO of Wireless Telecom Company, is facing a
difficult situation. He accepted a project proposed by 6 of his cleverest R&D specialist, The Maximum
Megahertz project.

This project is now behind. In order to get out of this “quandary” and avoid such issues in the future, Olaf
Gundersen and his team should ask themselves these questions. How can they learn from their mistake?
How to identify a risky project and put an end to it?

This particular case is related to chapter 14 of our textbook. This chapter deals with project closure or
what to do when your project is done. Although here our project is not done, these chapters discuss the
main reason why it is so. It is said on page 505 of the textbook, “the closure phase is as important as any
other phase of the project. Observation tells us that organizations that manage closure and review well
prosper. Those who don’t tend to have projects that drag on forever and repeat the same mistake over
and over”.

It is said in our case that this project is not the first one Olaf and his company as difficulty with. Matter of
fact, there were three other projects that could not be completed in the last 5 years. The CEO kept on
investing resources into these projects knowing that they were dead end. We can therefore, affirm that
Olaf did not learn from his mistakes. He needs to include in his future plan of action a review stage after
each project completion. Here, we seem to have a “perpetual” project which is a never ending project.
For instance, completing this project will take 6 additional months when it is already 4 months late. Also,
this project initially demanded $600,000 and now requires $800,000 more. The team faces numerous
issues such as power reduction, speed increase and use of a new technology battery. In regard to all the
information given, I will suggest that Olaf puts an end to this project. He could certainly pour more
resources into the project, but doing so will not be a wise decision, in regard to his past failures.

Also, Olaf is already discouraged and unmotivated about this project “his gut feeling tell him the project
will never materialize, and he should get out”. In other to avoid having the same issues down the road,
effectiveness Olaf and his team need a plan of action. In this plan he first needs to review past projects
and identify recurring issues. For that, he should hire and independent facilitators that will review previous
or current projects that will draw lessons learned and advise on future procedures.

Second, he needs to evaluate his team members and look for any issues such as of group decision, problem
solving processes, group cohesion and quality of information exchanged as suggested in our textbook
page 512. Also, before accepting any new project, Olaf should make sure he understands all the parts and
that his Telecom Company is fit to fulfill the project. An article by Ted Klastorin and Gary Mitchell, suggest
that planning is a critical step in project completion.

We can read from this extract from the article, Optimal project planning under the threat of a disruptive
event, “A critical part of most project plans is a baseline schedule (or pre-schedule; Herroelen, 2007; Van
de Vonder et al. , 2007) that is frequently used for timing resource allocation decisions in supplier
contracts as well as communicating with project stakeholders and setting benchmarks for project
monitoring and control. The importance of defining stable baseline schedules has been recognized by the
Project Management Institute (Project Management Institute, 2008)”.

Furthermore, this article adds that “Given the importance of baseline schedules in the planning process,
researchers and practitioners have focused on methodologies for finding schedules that are robust to
random durations”. In this article, the authors propose a model or formula to use in case of disruption as
follow “In this article, we introduce a problem faced by managers who are planning complex projects; that
is, how should project managers react when faced with the threat of a possible DE that would stop all
work on the project for a given period while overhead and indirect costs continue to accrue?

While this problem is related to previous work on project risk, our model analyzes policies that minimize
expected total costs under very general conditions”. Although we will not go in dept. into the model, but
we are here assure that they ways to effectively deal with disruptions. In conclusion, Olaf should step out
of this project and refrain from engaging in any new ones before he consults a review committee that will
help highlight the errors he has made in the past. Also, we suggest that looks closer at his planning strategy
and review his team.
Problems:

The company is facing lots of problems regarding the project and overall the company is facing
many other problems due to this and other projects that have not completed yet which has started 5
years ago. The problems are as follows:

The project costs $600,000 at the time of acceptance of the project and the amount is material for the
company and the completion of the project is not even certain and the project seems to be the waste of
money and time.

The outcome of the project is uncertain and Six-up-and-coming young R&D corporate star group is asking
for 6 months and $800,000. The first investment seems to be a waste and a new investment can be a
waste as the company does not have enough time to give because the project is already 4 months behind.

Olaf Gunderson, the CEO does not even understand the technical importance of the project, therefore,
he is not able to pass his judgments regarding the extension of the time and excess money to provide the
group for the project.

A manager familiar with the project has given his suggestion that the problem pack problem might be
resolved but the battery problem cannot be resolved by the group. The problems can still come in front
after investing both the time and the money.

Megahertz is not only an example however, there are three projects which have not been completed since
5 years. The company is facing a problem of never ending process of the project incomplete practices.

The company is facing financial difficulties and if it funds Megahertz project then it needs to arrange
money from outside source because if it finances itself then it can face an out-of-cash situation.

According to the CEO, he does not want to lose the six bright stars on the Maximum Megahertz project.
The decision should be to retain the same staff for the project who are already loosing time and money
both of the company.

Maximum Megahertz Project Case Solution & Answer

Symptoms:

It seems that the CEO does not even know the strategic importance of the project and without
knowing its importance he has invested money to facilitate the group which he does not want to loose
from this project.

The continuous failure of projects indicate that the company does not have an implementation of
acceptance feasibility plan while accepting a project and even no monitoring is in place to review the
progress on timely basis, therefore, the project has delayed for 4 months and no action has yet been
taken.

The company is out of cash and it does not even have controls in place to have money with them and they
accepted research project without considering the future need of money.

Problem Causes:

The company has bad internal controls in place because there is no monitoring process on an
ongoing project because since 5 years three of the projects have shown a never ending process of the
research phase. The company lacks the strategic importance of the project while accepting a project and
continues monitoring process in place. The company has a bad cash flow management because it came
up with a management in an alarming situation. The importance is given to the personal contacts (the six
bright stars) not the company and the work done strategy.

Action Plan (short-run and medium-run):

The action plan for short-run is based on the current situation analysis of the company is to go for
a review for not only this but also for the other projects which are under process of research and
development phase. Discuss the findings with the other responsible member of the company along with
the project research team and take a bold step and a rational decision should be considered, as in this
case the battery problem in uncertain, therefore, the company must judge to carry or to terminate the
project with a unsuccessful results of the battery problem. Such assessment is required for all other
projects whether to continue or to terminate the project(project management know-how)
Maximum Megahertz Project

When a project is initiated, the scope and nature of a project are determined. Project managers should
be very careful at this stage. In the Wireless Telecom Company case, Olaf did not understand the
importance of the Megahertz Project.

That is why after consuming $600,000 the project was still far from completion. It was lagging behind by
4 months while the contractor was asking for another 6 months extension adding up to 10 months. To
make the matters worse, a further $ 800,000 is needed to be injected into the project. All this is as a result
of a poor initiation approach. After going through initiation, a project should be planned to the last detail.
This takes into consideration the time span, costs related to the project and the required resources.

Wireless Telecom Company team did not plan adequately. As a result, the cost spiraled out of control and
different opinins started pouring in on whether to abandon or go on with the project.Once a project has
been thoroughly planned, it moves to the execution stage. Here all processes and activities that are
necessary to complete the entire project are put into play. All resources, people and activities are
supposed to be co-ordinated together according to the plan laid out. Of critical importance is the fact the
execution milestones need to be checked from time to time.

Under the monitoring and controlling phase, progress performance is keenly observed taking care to
identify problems. Actions to correct these problems are then taken. This includes: knowing the current
status, checking what has been done against what was planned, putting project back on track and quickly
incorporating changes. The Maximum Megahertz Project had a series of roadblocks such as power
reduction, technnology and speed. Olaf’s team lacked change management.

The project needed modifications and re-assessment.Finally, the project is completed if all the steps are
carefully followed. In this stage, the project is formally endorsed as complete. All group activities are
finalized. Any contracts outstanding are settled in a way that nothing is left pending. In future, Wireless
Telecom Company will have to institute strict control systems.

The company should initiate strong project controls that keep track of every activity and give feedback on
setbacks. Communication channels should be put in place to facilitate a smooth channeling of information
to and from the project. Project control keeps a project on track, ensures timeliness and that activities
remain within the budget. Control starts right at the planning phase. Failure to do so leads to the problems
experienced by Wireless Telecom Company.