During Part 1 of this article we discussed EFEA from a theoretical point of view. For this segment, we will do some application of that theory to drive home some factors about how environmental forces are present and how we can counter them. Let’s start with a step-by-step sequence to apply this concept.
- List the factors that are present that could affect the project
- Quantify the factors through direction and speed
- Establish tactics to counter those factors
The first step is relatively straightforward and can be accomplished by a meeting with some brainstorming tools. The main question to ask is: What will affect the project or goal?
From this question, you can list a variety of factors and then refine them, but you will be surprised as the list will undoubtedly be extensive, especially if you make the question above include any strategic considerations. For instance, one person may say “stock market changes” and, although you may want to discard this one, it may actually be a big consideration demanding some research to ensure you consider the stock market factor completely. An example of this was a map I saw in a conference that showed the US states and the color of each state changed throughout the years from blue to red. The presenter explained that the color indicated the state budget condition, with blue being a good state budget, red meaning the state was in debt. I noticed that one of the states remained blue while the others were red. Others noticed it too. It turned out that this state established rules for mortgages that no other state had in place. When the mortgages plummeted, this state remained solvent. They ensured that environmental factor did not affect them with some planning. The same is true with stock market changes.
Once you have the different factors listed and refined, then you must quantify those factors. This is done by using a compass heading to denote the direction of force. The “course” of the individual or company would always be 0 degrees (due north) and the direction of the vector would always be in a clockwise direction at 0, 45, 90, 135, 180, 225, 270, or 315 degrees (mostly for simplicity sake). The 0 degrees would be “full headwind” which means the force presents something that is having a great effect on your course, while the 180 degrees would be a tailwind which would help your course. The 90, and 270 degrees would be cross-wind effects (to the right or left respectively) for which you would have to adjust your course pretty drastically in order to overcome.
At this point we have identified and refined the forces and developed the direction of the force (again a brainstorming session would be fine for this step). Now comes the challenging part – the amount of force or the “speed of the wind” either for or against you in the situation. This can be accomplished by estimated the amount of revenue the force will cost you (worst case basis) using the amount of revenue per month, per year, or whatever other measurement that you wanted to use. Just ensure it is consistent with the estimate of the force, otherwise the result will be severely skewed.
Let’s take an example to illustrate this concept. The numbers are fictional in order to make the example as straightforward as possible.
Company X makes wooden toys and they make $100,000 a year in revenues. In one year, the wood supply is critical and they lose the ability to make as many wooden toys, but they decide to expand into a more synthetic method to make the toys which mandates them spending on machine to manufacture the material to make the toys.
The force against the company is coming from the 45 degree angle since it is not really a headwind (0 degrees) but it does exert a force that has a great effect on the company. The hard part, as I said before, is the speed of the force against the company. In this case, let’s assume that the lack of wood will cost the company 50% of its revenue for the next year. If the revenue stays consistent (100,000), that means that the lack of wood would cost the company $50,000.
To summarize the numbers, they are as follows:
Direction of Vector: 45 degrees (the same as saying “the wind is from 45 degrees – northeast)
Speed of Vector: 50 (we will remove the three trailing zeroes to make 50)
Speed of Course (Called Airspeed): 100 (again removing the three trailing zeroes)
Direction of Course: 0 degrees (due north)
There are formulas for this is something like the following (thanks to answers.com for this)
Wind Direction Adjustment (WindDir) = WindDirection +180°
Wind To Track Angle (WTAngle) = DesiredCourse – WindDir
Wind Correction Angle
Groundspeed = airspeed*cosine (WCA) + windspeed*cos(WTAngle)
Or, more simply, you can use the following website to make your calculations – http://www.csgnetwork.com/e6bcalc.html
When I plugged in the Wind Direction (45), the Wind Speed (50), the Airspeed (100), and the Course (0) into the section that had text boxes for these figures I came up with the following:
Heading (change in company course into the wind): 21 degrees
Ground Speed (revenue as a result of the force): 58
This would mean that you would have to turn into the wind 21 degrees which would lower your speed about 40% from the original speed. What this means for the company is that it will cost them about 40% of their revenues. However, this also means that, if the company expands its products to other materials besides wood, it could counter this force and actually move the force into a tailwind, which would increase their revenue. A company actually did this and grew while other companies were downsizing.
This model is not actual science, but it does give the company quantification of forces that would otherwise be recognized but not realized. I am refining this method to make it more adaptable to other industries, but just to make an example of cybersecurity industry you could use malware as a force against the company with the loss of revenue being loss of reputation (which could lead to a loss of revenue) and show that loss with the force direction and speed. There is nothing like showing how a headwind can force a change of course much like it changes course in an airplane.
I share this because my company philosophy is Learn, Offer, Value, and Educate (LOVE) (please see my website http://www.grectech.com). I am hoping that this theory energizes someone’s thought processes to refine and use this model. I am using something like to in a paper on MegaProjects for the Project Management Journal, which I will complete in a few weeks. If there are any comments, please let me know.