Monday, April 18, 2011

3 Keys to Managing Change

If you’re okay with making only 60 percent of the compensation you deserve for project changes, keep managing change like you always do. If not, start implementing these three principles!

1. Never surprise your client.
2. Ask for the additional compensation at the appropriate time, which usually means before a significant change is made.
3. Have good documentation (on direction given and level of effort required).

These “Keys to Managing Change” were developed from the results of a study conducted by a large A/E firm on how much compensation they were receiving for client-driven design changes occurring during the design phase of their projects.

The results of the study indicated that the A/E firm, on average, received only 60 cents of compensation for every one dollar worth of design effort expended on making the changes for the client. These were design changes that the client was asking the A/E firm to make. This did not include the internal changes that occur during the normal course of design development.

So why did the firm only receive 60 units on a dollar? After all, these were changes that the client was asking for, so full compensation should be expected. The study summarized the following reasons for not receiving full compensation for the design changes:

- PMs were not asking for the additional compensation.

- When a PM did ask for additional money, they were waiting until the project was over or the change was completed before approaching the client to ask for additional compensation.

- When approaching the client to ask for additional money, the PM could offer little if any documentation of the direction given by the client or the level of effort required to make the changes.

Follow these principles when managing change and don’t put yourself in a position to receive less compensation than you deserve! To learn more tips and techniques you can use to become a better and more successful project manager, check out PSMJ’s Ultimate Project Management Manual.

PSMJ’s Ultimate Project Management Manual can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order, e-mail or call PSMJ customer service at (800) 537-7765.

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