PREP Case preparation and Reflection

The Puerto Rico Education Project System Development In An Island Paradise

Preparation Notes:

Puerto Rico has a population of four million on an island of only 3,400 square miles. It is a U.S. possession, and its citizens have full U.S. citizenship, but the people have chosen to continue as a commonwealth rather than as a state of the Union. This means that they receive protection and govern­ment aid, but they are not required to pay Federal income taxes, and they have considerably more governmental freedom than they would have as a state.

Puerto Rico is more densely populated than any state of the U.S., and the proportion of people below the poverty level is much greater than on the U.S. mainland.

The Puerto Rico Education Project (PREP) resulted from a contract negotiated by a division of a large U.S. company (here­after called USCO) with the Puerto Rico Department of Education. The contract, funded by the U.S. government, specified the installation of a large mainframe computer and associated hardware, the design and implementation of a system to assist the Department in evaluating the results of education programs funded by the Federal government, and development of a large database containing data about all the students, teachers, and schools throughout the island. The cost of the hardware was about $5 million. It was expected that system design and devel­opment would require another $10 million, consisting primarily of personnel costs, and would take three years to complete.

At its peak the project staff would consist of about 25 people, of whom twenty would be relocated from the U.S. and the other five would be local hires.

As the contractor, USCO agreed to perform the following:

• Design and implementation of methods and procedures for the collection and storage of educational base-line data.
•  Design and implementation of data handling procedures.
• Design and development of mathematical models and techniques to permit the continual assessment and evaluation of educational programs.
• Design and implementation procedures for the maintenance and updating of data in the base-line framework.
• Training of Puerto Rican personnel in effective use of the system.

Project Staffing and Other Initial Decisions

Client perceptions of the success of prior projects performed by the company was one of the most important factors in obtaining new business, so client satisfaction was a primary objective, and quality control was closely monitored.

It was clear to USCO executives that the Puerto Rico project should be classified as a domestic assignment. Puerto Rico was not a foreign country; it was part of the U.S., so the international policies did not cover PREP. This was to be administered as a domestic off-site project, the same as if it were in Oklahoma or Illinois.

There were to be three levels of management: Level 1, the Project Manager, who would report to a USCO Vice President in headquarters; Level 2, the System Design Manager, the Programming Manager, and the Administration Manager; and Level 3, several first-line managers reporting to the System Design and Program­ming Managers.

Next in line was Gary Johnson, who had just completed a major project at the Pentagon and whose expertise was in hardware. He had managed large numbers of people in complex military projects, although none had any connection to education. Johnson had never been involved in an off-site project, but this one appealed to him partly because he saw this as an opportunity to aid humanity and alleviate poverty in some small way.

This was to be a three-year project on a remote island, so the families of project personnel would be moving there with them. The moves were expensive for the company, so each employee selected was required to agree in writing that the family would commit to staying in Puerto Rico for three years. There were, of course, provisions for leaving sooner for valid reasons such as illness of the employee or a family member. There were also provisions that virtually guaranteed that the employees could count on continued employment with USCO for at least 18 months after completion of the contract; in jobs of equal or greater status and compensation.

The staffing plan called for a small team of systems analysts and planners in the first year, building up gradually to a peak of 30 people by the second quarter of the second year. Program­mers would not be needed for the first nine months or so. The mainframe computer was being custom-designed and would not be available until then, and there would be no defined programs to write until a substantial part of the system design work had been done. However, a large U.S. Army project had just been completed at the Pentagon that had employed a number of young, bright program­mers. Since it had always been difficult to get good programmers when they were needed, Johnson felt it prudent to hire seven of these programmers and take them along to Puerto Rico. Smaller comput­ers could be made available for them to work with, and surely there would be important tasks that they could perform.

The Move to Puerto Rico:

It was becoming increasingly evident that conditions in Puerto Rico were considerably different than had been expected. Living costs were actually about 15% higher than in the U.S., particularly at the supermarkets, which had to ship most products in from the U.S. and other countries. Another problem that surfaced immedi­ately was schooling. There were about 15 school age children among the families in the project, and the school term was starting shortly after their arrival. Belatedly, it was realized that the basic reason for the PREP project was that the school system on the island was mediocre; teacher and principal salaries were extremely low and facilities were old and in poor condition. Some schools did not even have electricity. Many of the windows were metal louvers rather than glass, and had to be closed during the frequent rain showers. At such times, the pupils had to sit in the dark until the rain stopped. Also, the language in the public schools was Spanish, which none of the project children spoke. It was obviously necessary that they attend private schools, at an average cost of $2500 per semester per child. In a foreign assignment, private school would have been assumed, but since this was a domestic assignment it was decided that a schooling allowance was out of the question; it might have led to demands from employees on other projects that USCO pay for private school tuition. Instead, for each employee with school age children, salaries were raised just enough to cover the schooling costs. It was understood by the company and by the employees that this was a temporary raise and would be rescinded when they returned to the U.S. mainland. It took several months for agreement to be reached on this issue, and it was the source of considerable bitterness.

The most serious morale problems were with the spouses of the employees. Most families had only one car, which the employee needed for the trip to the office. Many of the wives were stranded at home most days, with small children to care for, and neighbors who spoke little or no English. They were also disturbed by the slower pace of life as compared to the U.S., which they derisively termed the “mañana” philosophy, especially when they needed some service professional such as a plumber or painter to come to the house. Still another problem was a lack of telephone service; for the first year of the project, most of the families were not able to obtain a phone. Two women gave birth to babies and had no telephone service during the entire pregnan­cy.

Dolores Valdez, the secretary who became Administration Manag­er, proved to be competent at finding good office space. Banco Popular, the largest bank on the island, had just completed a new building in Santurce, in the heart of the business district. Dolores leased the entire 17th floor in that building, nicely furnished and with a panoramic view of the city. However, she had never managed people, and she did not like to get involved with the employees’ personal and financial problems. She pre­vailed upon Johnson to make those decisions and fight those bat­tles, so he had little time for actually running the project. This was a source of increasing frustration for him.

The PREP Project

The data collection volumes to be dealt with in this project were quite large. The Department of Education operates schools throughout the island. At the time of PREP, there were more than 2,000 schools, with 25,000 teachers serving nearly 800,000 pupils. Among all school systems in the U.S., only those in New York City and Los Angeles are of comparable size.

In their pleasant office facilities the project managers were beginning to recognize some of the problems that lay ahead. They were still involved with getting their families settled, but what had seemed to be a comfortable project schedule was looking increasingly tight. The system to be developed was still not well defined, but the volumes were staggering to contemplate. Burt Garfield analyzed the data entry requirements: for the 800,000 record Pupil file, assuming only 40 characters per record (much less than the U.S. Office of Education wanted), data entry alone would require three hundred person weeks of effort. This could not commence until forms and instruc­tions were designed, distributed, and returned, and it would have to be completed by early spring so that files could be built for the programs to analyze. Although this was a simple calculation, the contract estimates had not taken the data entry effort into account. The scope of the project had to be cut down; it was decided to collect data on only 200,000 pupils and to postpone the rest until the second year.

The system was intended to have a planning and research focus, since its main purpose was for program evaluation. To aid research, it should be possible to select a representative sample from a large population on demand, and software should be available to perform statistical calculations on the data. As a planning tool, the system should readily provide data relating to trends in pupil mobility, performance problems, inadequate facilities, etc. The system was also expected to offer advantages to teachers in the form of improved and timelier reports on pupil performance, such as test results and pupil profiles.

Progress was disappointing, however. Some of the problems that had been encountered included the following:

·         The programmers, who had been included in the initial contingent under the rationale that they might be difficult to find later, were unhappy. The large mainframe computer for which their programs were to be written would not be delivered for several months. There were useful tasks to keep them busy, such as writing specifications for programs, and smaller computers were available for some of the tasks, but they were anxious to write and test the actual code for the main system.

·         Data for every pupil and every teacher in one quarter of the 2,000 schools was to be collected. The data collec­tion procedure was designed so that each teacher filled out the data form for each of his or her pupils. In preparation for this, the project systems analysts inter­viewed principals and teachers in a number of schools. None of the systems analysts spoke Spanish well enough to communicate in that language. It was found that, although most of the teachers could understand basic English, they were having a very difficult time under­standing the procedure, which involved some fairly techni­cal concepts for which they did not have the vocabulary. Some of the analysts suggested to Gary Johnson that he hire two or three young Puerto Rican college graduates as analysts; they would be able to explain the concepts to the teachers in their own language. This suggestion was resisted by USCO officials, who felt that the language problem had been solved by the provision for Berlitz courses.

·         The data collection forms were printed and ready, but there was no satisfactory delivery service for transport­ing them to the schools, especially those located in the remote areas of the island. It became necessary to rent vans and for the analysts them­selves to deliver the forms, and later to pick up the completed forms from the schools. This was quite dangerous, because the rural interior areas were mountainous, the roads were narrow and sharply curved, and often covered with slippery wet leaves. Fortunately, the deliveries were completed with no accidents.

In spite of the problems, substantial progress was made during the first year of the project. The mainframe computer was finally delivered and the programming trips back to Washington were terminated. Programming and testing was behind schedule, but not as much as it had been a few months before. Dr. Hamill and the other Department of Education officials were pleased with the system design and with the capabilities they would have for evaluation, although they regretted the limited database. The curtailed but still massive data collection effort was completed successfully, and forms were shipped to a U.S. data entry service.

Most of the employees worked hard and conscientiously, but morale was at low ebb and this was adversely impacting produc­tivity. USCO executives were concerned; costs were higher than budgeted, and some important deadlines had slipped. A number of executives had visited the project, and most of them had been deluged with complaints from employees. In the ninth month of the project, Tom Ballard, who had just returned from a European assignment, was asked to conduct an investigation to determine what needed to be done to get back on schedule and on budget. He was also to take over direct responsibility for the project, so Gary Johnson now reported to him. Within limits, Ballard had authority to make any personnel and organizational changes that were needed.

From his one-on-one discussions with each employee, Ballard knew that about two-thirds of them had an intense desire to be sent back to the U.S. They, and especially their family members, were unhappy with living conditions, with the schools that their children were attending, and with USCO. Their poor morale had an adverse effect on productivity. Some employees spent a significant amount of time on the telephone with their spouses, who often called to complain about home problems.

The other seven employ­ees had a completely different attitude; they and their families thought Puerto Rico was a fine place to live and a wonderful opportunity to meet people from all over the world. They had developed warm friendships outside the company and had learned to love the outdoor activities that were available, such as golf and snorkel­ing. These seven definitely wanted to stay, and they included some of the most productive members of the project. There was considerable animosity between the two groups, which was also hurting morale. Some of those who wanted to leave were also excellent performers, and losing them would be a difficult problem at first, but some of the most complex programming was near completion. Ballard was fairly confident that the project could be implemented satisfactorily with the nucleus of the seven, who wanted to stay, plus eight to ten young Puerto Rican programmers and analysts who were available for hire. Some of these had already worked on the project on a part-time, temporary basis, and had proved to be fast learners and creative analysts.

However, he was not at all convinced that it would be a good idea to let all those return to the U.S. who wanted to go. His orders were to use this option only as a last resort. Finding jobs for all those sent back would be a major problem, since some other large projects had recently been completed. His biggest concern, though, was the precedent that would be set. After all, these people had volunteered for the project, and had willingly, even eagerly, signed up to stay for three full years. Based on this commitment, the company had invested substantial resources in transporting them and their belongings to Puerto Rico, and large amounts of executive time in responding to their personal prob­lems. The expense of sending them back was also considerable. By no means had this investment been recouped, and since meaning­ful U.S. assignments were scarce, they would not be nearly as productive in the U.S. as they would have been by staying with the project. It was an important project, too, with potentially great long-term benefits for the children of the island; were these employees unaware of that? The company’s policy guaranteed them a job in the U.S.; were they taking unfair advantage of the company? Should they be allowed to break commitments without any penalty? Certainly USCO’s policies were poorly thought out, but did not the employ­ees have some responsibility? Shouldn’t they have realized that living in Puerto Rico would be different than in the U.S., and that it was not an “island paradise?” Why did some employees love it here while most did not? Had the Puerto Rico-haters given the island a fair chance? Did their attitude that they did not like cultures different from theirs become a self-fulfilling prophecy? As Tom Ballard entered the dining room, he could see that two groups were separated, with those who wanted to leave on one side of the room, looking angry, and the others with serious but expectant expressions. He was still weighing the alternatives as he strode to the microphone.

Reflection:

          

          JAGR Consultant group was tasked with a difficult charge. Evaluating our companies position, the current standings of the PREP, and offering a set of solutions towards a failing project is never easy. But, that is why we hired them. The consultants did a good job capturing the essence of PREP related business evaluation with the following slides:

The first piece was important cause it is a reminder that our primary objective is client satisfaction. The second component illustrated what I thought was an essential piece for leading to a decision. 

The team from JAGR recommended keeping the seven employees that were happy and hire Puerto Rican programmers. 

I fundamentally agree with his plan but think that it is lacking in full depth. There are some additional points to recommend and realize.

The first piece to really understand is that the project was set to fail by management. As members of the board, we have to cognizant of internal mistakes so that we don’t repeat them.

The following is one area where we failed:

“John Piersall, the division Vice President for Personnel, was dispatched to San Juan for three days to determine the need for special policies. His mission was to evaluate whether language would be a problem and whether there was a difference in cost of living. He stayed at the Caribe Hilton, a pleasant hotel in an exotic setting on the beach. Although he expected to find that most people would speak adequate English, he was pleasantly surprised to find that the desk personnel, the bellhops at the hotel, and the people running small shops in the beach area had an excellent command of the language. He was not able to communicate with the maid who cleaned his room, but he reasoned that the teachers and princi­pals with whom the PREP employees would be dealing were educated people and would have no problems with English. To evaluate the cost of living, he discussed costs with a wealthy friend of his who was the manager of the San Juan branch of Chase Manhattan Bank. This individual had a beautiful home maintained by three servants, and he had not noticed any difference in living costs as compared with the U.S. He did mention that there had been some recent agitation by the independistas, a small fringe group who wanted Puerto Rico to declare its independence from the U.S., but he felt that the great majority of the people wanted to remain part of the U.S. and would not be influenced by the independistas. Based on Piersall’s report, it was decided that PREP could be administered as a standard domestic off-site project, without special compensation or other new provisions."

Gary Johnson didn’t have a chance to succeed because the initial planning stages were wrong. This is not to say that I am absolving him or any of the other employees of their personal responsibilities to the company and the project. The point is that as leaders we have to recognize accountability is a two way street. We have to be accountable for our actions. Mistakes are as serious as the results they cause, and in this case we are faced with a real serious negative result.

Having set the stage for accountability, our course of action should be to steer the project back towards a successful path. We should meet with the our customers first. They are currently happy and we want to keep it that way. While we won’t outright say our project is failing, we should take the accountable approach and try to realign some goals now that we have more current data. We wouldn’t want to endanger the welfare of the children’s education just to meet a deadline. If we can afford to take some time to regroup, we can at least plan more carefully and really assess our current position. We can’t know how to get to where we want to go without first knowing where we are. In this effort, we should also recognize that the current deadline needs to be reassesed.

Once the position is really understood then we can go on with the consultants plan to keep the seven employees that were happy and hire Puerto Rican programmers. We want USCO to have more control over the project and try to make the situation better for all involved. The timeline for the project should also be revisited based on where the project is now. Deadlines were missed, so the remaining aspects of the project need to be re-planned so that new deadlines can be put in place based on the new project direction that will be taken with Tom Ballard as the project manager. After revisiting the project deadlines, this will allow USCO to increase customer satisfaction because they will meet the new deadlines with proper planning. Ultimately we want success and that will begin with realistic expectations, the right employees, and support from management across the board.