PMI PMP Project Management Professional – PMP Blitz Review Part 2

7. Project Resources Management

Let’s talk about chapter nine in Pinback and resource management in particular, I want to talk about the human side first of resource management, I’m talking about emotional intelligence. Emotional intelligence. The ability to control my emotions and understand my emotions and the emotions of others. We have two types of emotional intelligence to be aware of. You have inbound, and that’s the self-management where I don’t blow up, I don’t lose my temper, I can control my feelings outbound about relationship management, that I don’t say things that can hurt others, I don’t react that could damage our relationship emotionally.

Competent teams are better teams. I think we would all agree with that. It also helps with the reduction in staff turnover because we get along and we respect one another. Doesn’t mean we always agree, but we show respect and that’s important. Some terminology when it comes to resources. So you have a role. It’s just a generic team name, an app developer, a tester, a chemist, whatever it is, a technical writer here. So it’s just the name that that role is.

So it’s the generic project team name. Authority is the level of decision making ability. Responsibilities are actions and expectations, and competency is your depth of skill and knowledge. All right, let’s take a look at a matrix chart. Remember, a matrix is just a table. So in this example, we’re looking at a Racy chart where we used a legend of responsible, accountable, consulted and informed. There can only be one individual accountable per activity.

A Ram is a responsibility assignment matrix. That’s where you have your own legend. Doesn’t have to be a Racy legend. Technically, a racy is a ram. But a Ram is where generally it’s more like you create the legend and then roles and responsibilities. Rather than having the team members actual names, we would put the role in there like application developer, tester designer, writer or whatever the case would be. And then you would have a legend for that as well. Or just a checkmark to show that role does this type of work or the specific activity. So that’s a matrix chart.

You will need to know these HR theories, so I’m going to hit them quickly. Maslow’s hierarchy of needs from the bottom to the top. Physiological safety, social esteem and self actualization. So I can’t satisfy needs below to the needs above, rather to the need below is satisfied. So I’m not interested in esteem if I’m very, very thirsty and hungry. I want that need. I have to have that need satisfied first. Hirschberg’s theory of motivations describes our Motivators and demotivators.

That motivators promote performance. Demotivators actually take away if they’re missing, like poor pay or pressure or whatnot. Remember, our hygiene agents are just part of the employee relationship. So pay, benefits, safe working environment. If those are missing, then those then will be a demotivator. I can’t Motivate until hygiene agents are satisfied. So Herzberg’s theory of motivation then we have McGregor’s, X and Y. It’s a management perspective of people. X people bad, micromanaged, lazy, can’t trust them. Y people.

They’re self led, motivated, capable, can get things done. Then we have David and McClellan’s three needs theories that our needs are acquired over time, so sometimes called the Acquired Needs Theory. And our needs are achievement, affiliation and power. And that one of those needs, is our driving need. And so be familiar with that. The only one that you take a test for is the Thematic App Perception test with the David McClellan’s acquired need or three needs theory. Our needs are acquired over time. A new term that we saw in the Pemba chide Six edition is the idea of a team charter. The team charter basically just says, what are our values as a team? How will we communicate? How will we make decisions? What are our conflict resolution approaches? What’s our guidelines for meetings? What are our agreements with one another?

 And what are the ground rules that we all enforce? Not just the project manager. So, a team charter, the Tuckman development model. It describes how people come together and what they do in that stage of this model. So forming, you get together, storming, you’re duking it out. Who’s in charge, who’s going to lead in certain areas, norming, you settle down to your roles and go about working together, performing. You begin to act collaboratively, collaboratively, and everyone’s working well together.

It’s possible you go backwards, but our goal is to just go forwards. And then, of course, the very last phase is adjourning. And that was added on later, but that’s the idea. The teams are temporary, so we adjourn very important terms there. In resource management, I mainly focused on the HR terms because, remember, resources are also equipment, materials, things that you need that you may have to procure or have it’s in order to do the work. So we manage resources. It could be physical things. We lead people. All right, good job. Keep moving forward.

8. Project Communications Management

Chapter ten of the Pinback Guide all about project communications. One of the most important things that you do as a project manager is to communicate. 90% of your time is communicating when you get into the communications management, a little formula you’ll have to recognize is our communications channel formula. Okay? So the formula is N times N minus one divided by two. So in this example, it’ll be ten times ten minus one is nine. So 90 by two is 45.

There are 45 communication channels. Want to know that for your exam? A lot of times I’ll get the question, do I include the project manager in the number of stakeholders? So do I add one? Like in this case, would it be eleven times ten divided by two? Or is it really just ten? Or that could be a trick. I can’t say definitively, yes, you always do, or yes, you always don’t? Because they could say you are managing the project and you have eight stakeholders. So I might be tempted there to make it nine instead of eight. So what you have to do this, you aren’t going to like this. What we have to do is figure it out first for nine and see if that answer works and then figure it out for ten. Does that answer work?

So you might have to do the math twice to see which one shows up in the answers from your choices on the exam. Also have to worry about this week you have ten stakeholders, next week you’ll have 23. How many more channels will you have? So I have to solve for ten, then solve for 23 and then find the difference of those channels. I can’t just say I have 13 more, so I’ll do that math. You have to solve the channels. It won’t work if you just say 13 more. All right, so that’s the communications channel formula. Then you remember the communication model.

And this guy with his flowing hair here. All right? So remember these components though, sender you’re the receiver. My email is the encoder. Yours is the decoder. The medium is the network. You are the receiver. So your machine is the decoder, your email system, and then any static or disruption that garbles or distorts the message is noise.

A barrier is if two people won’t talk to each other or they can’t because they speak different languages. And acknowledgment means I receive the message, doesn’t mean I agree with a message. Feedback and response is where you ask questions or clarity or you say, okay, I got it and I’ll take care of it. So that’s the communication model. Know those terms for your exam.

9. Project Risk Management

Chapter eleven in the Pmbok guide is all about risk management and a lot of processes here in risk management. So make certain you know these terms. So here are the important terms. You must know some different levels of risk. Remember, we have individual project level, individual project risk. So individual risk, but also also the overall project risk, the odds of the project being successful. Our goal in risk identification is to identify risk.

 Our goals in qualitative and quantitative analysis is to see what our risk exposure is. So what are the threats and opportunities associated with those risks? Not all risks are negative, so we could have positive risk as well. Some prompt list. This is something that seems like it could be a really good exam question. So you have this VOCA VUCA. Is it volatile, uncertain, complexity or ambiguous that helps you to find risk? A TCOP, technical, environmental, commercial, operational, political.

So that makes you think about what risk would be in those areas and pestle, political, economic, social, technological, legal and environmental. So those are some prompt lists to help you think about and help the project team think about where our risk in the project. Remember our probability impact matrix. You have the risk probability times impact gives a score.

This is qualitative using an Ordinal scale. We do the same thing, but we do this in quantitative where we really study and we have evidence of that probability and we really study and we look at the impact and then that tells us our expected monetary value. You sum up that expected monetary value and that helps you find your contingency reserve. Pay attention that some of those impacts could be positive, so that could change the expected monetary value.

These are negative, but look at risk c is positive. Also, in risk management, we talked about negative and positive risk responses. So negative you could escalate it, avoid it, transfer it, mitigate it, or accept it. And then we had positive risk events. Remember we had escalate. We have exploiting, sharing and enhancing and accepting. So those are positive risk. So know those risks, know the characteristics, sticks to those. If you need a little brush up, it’s chapter eleven of the Pmbok. Or go back and watch our course on risk management. All right, great job. Keep moving forward.

10. Project Procurement Management

Chapter twelve in the Pmbok is all about procurement management. There’s a lot of terms in this chapter you need to know. First off, the market conditions. Remember, we had sole source. There’s only one single source. There’s lots to choose from, but you have your favorite and oligopoly. The market conditions are so tight that what one layer does affects all the other players in that marketplace. Our procurement process in terms. So you’re the buyer, you create a statement of work or a terms of reference, create an invitation to bid, request for quote, request for proposal. You give that to the sellers. Then you have a bidders conference, statement of work updates. You give that back to the sellers. The sellers then will go create a bid quote or proposal, whatever you ask for, and give it back to you, the buyer. You and the buyer negotiate, then you choose which one you will purchase from and then you create a contract. So that’s the whole process.

And the key terms that you want to know for procurement. One of the key things you’ll need to know for your exam will be what contract type is most appropriate for your project and for a given scenario. So we’re going to walk through all the different contract types and the big picture of contracts and really the characteristics of a contract you’ll need to be familiar with. So really know these contract types. I guarantee you you’re going to have some questions on contracts on your exam. So all about contracts. It’s a formal agreement between a buyer and a seller.

The US will back up contracts through the court system. Contracts state everything that has to be true in order to close out the contract. Any changes to the contract, they have to be formally approved, controlled and documented and signed off on. Your contract may have the terms of how you are allowed to change it. It may be an addendum or it may be up to x amount of dollars or what’s the process? So the contract can even define how changes to the contract are allowed or declined. Just because I have a contract doesn’t mean I have to accept the changes. I could say we don’t have time, we’ve got other commitments, can’t take it on. Or we could say let’s finish this contract and we’ll make a new contract for that change. Contracts can be used as risk mitigation. And we know this because we’re talking about which risk response, transfer it.

I know you all got that one right. Some contract legalities here. There are two big categories we’re going to look at with contracts. We have a fixed, fixed price or cost reimbursable. Fixed price means this is the amount you pay. Cost reimbursable means you’re going to pay the cost that the vendor has. The seller has to perform the work in the contract. And there’s usually a profit margin built into that, but that has more of a flex because if the vendor’s costs fluctuate because of waste or some other nuance, then you have to pay for that because the cost is the type of contract you’re paying for the cost to do the work. So generally cost reimbursable are riskier for you. The buyer fixed price is fixed. You’re only going to pay this amount. And there’s a couple of different flavors. With both of those we’re going to look at a contract has an offer. So this is the work we offer to do for you.

We both accept it. We have to agree to it. And then we get the consideration. We get the payment that I will offer to build your house in consideration of the $500,000 has to be for a legal purpose, and it has to be executed by someone that has the capacity and authority to act on behalf of the organization. So if I’m just the project manager, I can’t be signing contracts. I need to give that to my manager or the contract department, whoever really has the authority to make that deal between the parties. A firm fixed price contract means I am the seller and you’re the buyer. And I say I will deliver to you four tons of pea gravel and it’s going to cost $1,200 or whatever, but I give a firm price. You’re not going to pay more or less. It’s the deal. So the seller carries the risk of cost overruns. If I didn’t pay attention to how far away you are from where that pea gravel is, how far I have to deliver it, and it’s going to cost me a lot of money and fuel that’s on me. So any cost overruns comes out of my end. So if I’m building a big deck on the back of your restaurant where people can go out and eat their lunch outside or whatever, and I say I’ll do that for it’s going to cost $10,000. All right, we have a deal. And then I get out there and I start working. And my team is having waste. They’re cutting the wood to the wrong length or the wood got wet or damaged. You aren’t paying any more.

We have a firm fixed price agreement. That’s the deal. It’s on me, the buyer, you, specifies what you’re purchasing from me. Our contract could have an addendum if you want to change it. So I’m building this deck for you. It’s $10,000. And you come out and say, hey, this looks really nice. How about you build some picnic tables too? Hey, we can do that, but that’s not part of our contract. So we’re going to have to do an addendum for that change or we might just make a whole new contract for these picnic tables. So the firm fixed price specifies exactly what you’re getting for exactly this amount. So we’re really clear on that. A similar one is a fixed price incentive fee. What this one does is you say, Joe, I want you to build this deck for me on the back of our restaurant here, but I need it done in like ten days because we have a big party that’s going to happen in ten days.

If you get it done by then, I’ll give you a $2,000 bonus. So I have a fixed price and an incentive to get this all done in ten days. So now I have to do some work about being more efficient and keeping my team on top of things and making sure there’s not waste because I want to hit that deadline to get the bonus. The incentive fee, the incentive fee in that example was for schedule, but you might also say it’s for cost, which at a fixed price it’s really cost doesn’t matter, but a technical performance. So you could say if you can make this throughput even faster or make it more reliable or make it more attractive, or what you create is low in cost to support, then I’ll give you a bonus. There might be a price ceiling on that bonus. So a good example was in Indianapolis several years ago.

I lived in Indianapolis for a pretty good stretch. As some of you know, in Indianapolis there was a big project downtown where all these interstates came together, all these highways came together. They called it the mega project. And they gave this construction company, I think it was $100,000 for every day they got done early. So the up to a million dollars, I think that’s what it was. It was something like that. But the up to is the ceiling. So if you got done early, for every day you were done early, you got a bonus about $100,000. So you could be up to ten days early is the max. If you got done twelve days early, you didn’t get 1. 2 million. They got 1 million or whatever the terms were, but it was something like that. Well, the company that was doing the project, they worked 24/7. They had lights out there. They had a crew out there at nighttime, daytime, all the time they were working on it. So they had done the math of what would their labor be per day to get that $100,000 bonus.

So it may not have been a pure million dollar bonus for them, but they spent a little bit more by crashing the project and fast tracking the project and working twenty four seven. That was less than the cost of that was less than the million dollars. So they improved their profit margin so that’s the idea of an incentive fee, the risk they had was if there was a mistake and it set them back on their schedule, it would begin eating into that bonus because they would be done fewer and fewer days less than what they had anticipated. So the seller carried the risk of cost overruns on a really big project that’s going to last for several years.

We might allow a fixed price with an economic price adjustment, an FPE. What this means is the price of materials if they fluctuate at the cost of steel or the cost of inflation, any other external conditions that could affect the price unfairly for the vendor, then we would adjust that fixed price up or down. So it goes both ways. But we have to identify what will be the standard. How will we know how much steel costs? So some type of a marker that we would follow that that would kick in. If it went above X amount percent or below a percent, it would kick in. So this economic price adjustment is good for long term projects. A cost reimbursable generally bad for you, the seller.

Now, I’m going to be the buyer, okay? I’ll be the sleazy buyer over here. And I say that because cost reimbursable often seem like used car smells and I can really control what you pay as the seller and you’re the buyer. So this is anytime you have cost plus cost plus a fee or some other modifier, it’s okay to use this if the scope of work can’t be defined early. I know we want to hire you to build this deck, but we’re kind of making it up as we go. All right. It’s going to be kind of crazy. We want some different patterns and some different things in here. All right, we’ll do that. But it’s going to be cost plus a fee to make these patterns out of wood or whatever it is as we go. High risk may exist in this type of a project where we do a cost reimbursable. So if lots of risk happen, then you have to pay for those because there’s a lot of risk here. We’re not going to carry all of this.

We have to share that risk. The buyer, you carry the risk of cost overruns. So if I have wasted wood and material, then you have to pay for that. It’s a cost plus or cost reimbursable, so you have to pay for that. A cost plus a fixed fee is where I say I’ll come build that deck for you. And it’s $5,000 plus the cost of the wood. All right? So you have to pay for all the materials. So I’ll get receipts and show you that I bought wood. The danger with this is that if my team wastes wood or gets wet or damaged or whatever, you have to buy more wood. So it’s a cost plus a fixed fee. You’re paying for that material. So it’s a little bit dangerous. The fee is constant. That $5,000 fee is based on the scope. If you change the scope like you want to add picnic tables or benches, that’s outside of our scope. So my fee could go up. So the materials and the fee is going to change because you’ve added more things to the scope. A really dangerous one here is a cost plus incentive fee.

A cost plus incentive fee is $100,000 to build this warehouse for you, or a barn, let’s say, for you. And in this construction, I’m going to give you a bonus if you get done early. So if I rush to get done and I have waste and so on, you have to keep buying the materials, but I’ll get a bonus if I get done early. So you carry some risk here that I’m going to rush and have waste. Haste makes waste in larger projects. You might have an incentive sharing and the split is typically 80 20. So here’s what’s happening here. I borrow money from the bank to buy an old warehouse and we’re going to convert this warehouse to condos. And I want to hire you to come in and do the construction of this. So I’m kind of the deal maker here, the broker. So I borrow the money, a few million dollars to make all this happen. You come in and are doing the work until you finish the project.

I am just paying and paying and paying. I don’t have a return on investment till you’re done, because I can’t sell these condos until you’re done or I can’t rent them out until you’re done. So an incentive sharing is where I tell you if you hit these dates, these milestones between now and completion or beat them, I’ll give you a bonus. So the idea here with this 80 20 split is we say this is what the work is worth for your labor and time to get here. But if you get done early, I’ll basically pay you 20% of what you would have had and so on and so on and so on. And so I can give you basically a bonus by getting done early. So you aren’t having to pay for additional labor, but you’re doing it well and you aren’t having waste and so on. So you being the business owner, the construction company, you aren’t paying for labor, but you’re getting paid 20%, a nice little bonus as if you had paid for labor. So it’s a cost savings for both of us that we share. I get the 80% idea is I am you’re getting 20% of what you would have paid and I have 80% because I didn’t have to pay it for you. It’s good because you don’t have the overhead, the labor. For me it’s good because you’re getting them faster or hitting your dates. So it’s an incentive sharing. It’s like a cost savings or a split.

The contract will define what that split is. Like that 80 20. You don’t have to say 80 20. You could say that the split is X amount of dollars. You could just say you get an early you get a little bonus here on these dates, so don’t get hung up on that 80 20 or incentive sharing. It’s just a way of setting some markers. You hit these dates, you’re going to get a bonus for hitting these milestones. Now, one of the most unusual types of contracts is a cost plus award fee. You want me to build this deck for you? Okay. And it’s going to be $10,000. So I build the deck, and I get done, and you like it. And I didn’t go over on cost. It’s really good. Materials are, you know, everything is $10,000. You inspect it and you say, great, Joe, that’s really good. I’m going to give you a bonus of $1,500. That’s the award fee.

So a cost plus award fee is a mysterious award that will be determined by you given to me, the seller. So the buyer determines what the fee is. It could be whatever they want. They could say, here’s a dollar. That’s your award. The contract really doesn’t specify what the award fee has to be, so the award is determined by the buyer based on my performance.

A time and materials contract is a very simple contract. Basically, it says, we’ll pay for your time, and we’re going to pay for your materials. So we could say up to 300 hours and up to $5,000. So we have a not to exceed clause. So the seller me, you’re going to give me an hour hourly rate and any materials that I buy, I’m going to give you a receipt, and you’re going to reimburse me for the cost. That’s time and materials, it can have a time limit as well, that this contract is good for six months. So that’s the time and materials you’re paying for time and you’re paying for the materials. Know those contract types and characteristics, be able to recognize them for your exam.

11. Project Stakeholder Management

Chapter 13 in the pmbok Guide 6th Edition is all about stakeholders. Really need to know stakeholders. Stakeholders are people that have an interest in your project. They can affect your project or they are affected by your project. So they have some different characteristics here. They’re interested in it. They have rights, legal or moral rights sites. They have ownership, ownership of an asset. They have knowledge that they can help or they contribute. They’ve got money, they have resources or just general support for the project. Stakeholder analysis is where we study the stakeholders and we can create these different grids. So the one that I would encourage you to know is the idea of a power interest grid.

So the higher the power, the higher the interest, the more closely you’ll manage that stakeholder. So these are some different flavors here. They all are the same. It just helps you create a stakeholder engagement plan. So this is integrated with other knowledge areas because all those other knowledge areas were interacting with stakeholders, all of them. So the other knowledge areas and processes overlap here with monitoring stakeholder engagement, it’s most directly linked to communications. So our communications management plan and schedule overlap as well. Obviously with stakeholder engagement, we’re making certain that we are actively engaging stakeholders. So we’re relying on our project management information system. Our information management system can help us engage stakeholders because we’re looking at activities, we’re looking at risk, we’re looking at issues. All of those affect people. If it affects a person, that person is a stakeholder, and that can affect them positively or negatively. In either case, we want to be involved with stakeholder engagement. We want to make sure we’re communicating and we have a clear understanding between the parties.

We have to use expert judgment, like we talked about decision making. You may have to make some decisions that are not popular with some stakeholders. You’re going to meet with stakeholders. We always want to be honest and direct with project news, good or bad. We don’t run from it, we don’t hide it. We go to the problem. So you’re always honest and direct. Communication, often face to face. Communication is one of the best approaches here. Data analysis techniques, alternatives analysis. So you think about other solutions. Root cause analysis.

Remember RCA, we’re looking for causal factors, not symptoms that are contributing to why a stakeholder doesn’t feel engaged, or they’re negatively engaged, or they aren’t a fan of your project. And then we continue to do stakeholder analysis throughout the Pinback guide. In this course, we’ve seen this idea of interpersonal and team skills. So you’ve seen all of this before. It’s just really important when it comes to communication and stakeholder engagement. You need that emotional intelligence. You need to be able to understand what a person is saying and how does that affect their lives and what’s their concern with that objective of the project.

Again, cultural awareness, understanding the different cultures and how that could influence the project or how your project may be interpreted in the light of that culture. What about leadership? You got to show leadership, and project team members can take leadership. Networking is going to happen. You want to make relationships, long term relationships over short term relationships, and, of course, having some political awareness. So stakeholder engagement. We’re talking about engaging our stakeholders, keeping them involved and excited in our project. All right, great job. Keep moving forward.

12. Section Wrap: PMP Blitz Review

Wow, you’re doing a great job. You have reached almost the end of this course. Just a few little things to knock out, but for all effective purposes, you’re done. You have covered all the exam material, and I think that’s great. You’ve done something that a lot of people don’t do. A little secret is a lot of people sign up for these types of classes, and then they fade off and they go back to their life. And like, someday I’m going to do that. Well, someday is not a day on the calendar, as you know. You have put in the work, you’ve invested the time, you’ve been dedicated, and you have set a goal, and you’re working towards achieving it. And this is a big chunk of your goal to finish all of these lectures to get to this point in the course. And really, I think that’s fantastic.

I know this is difficult material because I’ve taught it and you’re talking about it for more than a week. And so I know you’ve invested time listening to me, and I appreciate that, and I’m grateful and I’m humbled. There are so many choices out there, and I’m really thankful that you found this course and that you’ve chosen me to help you pass the P and peak. But make no mistake, you’re doing all the hard work. You’re doing the heavy lifting. So take confidence in that. And as you go in to pass your exam, just remember all of these hours that you’ve invested in learning this material to reach your goal of passing the PMP, and I’m confident that you can do it. So press on, keep studying, keep preparing to pass. You can do this. Great job. Finishing this section on The Blitz Review.

I told you it was a lot of information, really went back through and covered the entire course, the headlines of the course, and you had an opportunity to see every process again that we’ve discussed throughout the course. We looked at all the way back to the beginning about initiating, planning, executing, monitoring, controlling, and closing.

 And then we got into the very specifics from each one of the chapters in the Pinbach. And from this course, we looked at integration management, scope management, schedule management, cost quality, resources, communications, risk procurement, and stakeholders. Then we looked at those memory cards that you’re going to condense or boil down as kind of your cheat sheet when you get into the testing center. Remember, you can’t write anything down until the test timer begins. And then you did an assignment that was to map out all of the Edo’s.

I know that was painful. You can get mad at me if you want, but it’s going to help you learn the processes and the characteristics of the processes, what you need and what you do, and what you create inputs, tools, and techniques and outputs for each one of those processes. So a lot of information here in this blitz review. This might be a section you want to watch, maybe the couple of days before you go in to pass your exam. But do complete it as you already have. Obviously. But you might want to come back and watch it again before you pass your test. All right, great job. Let’s keep moving forward.