When it comes to effective project management, it’s all about focusing on the details. The reasoning for pointing this out is simple. If you take care of the specifics from the start, everything that follows becomes easier. Of course, you need a framework to help you to complete any project you set up. It’s here where a work breakdown structure can support your efforts.
What is a work breakdown structure?
When it comes to projects and project management, a work breakdown structure (WBS) appears self-explanatory. It’s a breakdown structure of the work you need to execute to complete a project.
However, it’s not that simple. There is more to it. It’s also worth considering what the Project Management Institute (PMI) has to say about it.
In its flagship publication - A Guide To The Project Management Book of Knowledge (PMBOK® Guide), the global non-profit professional organisation for project management defines work breakdown structure as a “deliverable orientated hierarchical decomposition of the work to be executed by the project team”.
In simple terms, it defines everything your project needs to accomplish. These elements are all then organised into multiple levels and are usually displayed in an easy to understand chart. It's worth pointing out that a WBS doesn't focus on the individual actions that you'd need to complete to accomplish a project. Instead, it focuses on deliverables or concrete, measure milestones.
You can also refer to these deliverables as work packages.
Let's say you’re building a new retail store. For such a project, you would need to break it into numerous manageable portions. Together, these portions or sections make up the total project.
In the case of this example, potential portions could be Foundation, Exterior and Interior. Once you’ve decided on these, you would then need to decide how much of a percentage of the total project each piece deserves.
For example, building the foundation, which includes the excavation could make up 25% of the project. Designing the exterior, which includes the frame, roof and windows of the building could make up 30% of the total. Meanwhile, the interior section - plumbing, walls, electrical, store layout and so on could make up the remaining 45%.
From there, you’d want to break down each into smaller manageable chunks. Under Interior, for example, you could allocate 5% to plumbing, 5% to electrical, 5% to walls and 20% to your store layout while the remaining percentage goes to any other actions you need to complete to check off the Interior section of your project.
Why should you create a work breakdown structure?
Now that you have an idea of what a work breakdown structure is, the next logical question is to ask why you should create one.
One way of explaining that is to consider the goal.
A work breakdown structure aims to make any large project manageable. That’s done by breaking it down into smaller chunks so that you can distribute the work across your team.
Another approach is to consider the various benefits.
It leads to improved planning
The first benefit is that it leads to improved planning.
The fact that you plan out precisely what you need to accomplish to complete a retail project means that work is less likely to fall through the cracks. What’s more, because it allows you to describe each activity clearly and concisely, there is less chance of ambiguity.
For example, if you want to roll out new planograms as part of your category refresh project across your stores, you’d want to ensure that you include all the details that make up the whole project.
That could include timelines such as the week beginning and completion date, your departments (Non-Edibles, Beverages, Perishables and so on), your chosen categories, who the buyer is that you need to speak to as well as the space planner responsible for the planograms for the department.
An added benefit here is that you can eliminate any work that isn’t directly related to the overall project and avoid scope creep.
It allows you to be smarter around budget and resource allocation
Since you have a better understanding of what the project entails, you’re in a better position to know how to spend your budget. It’s the same for your resource allocation.
If you’ve planned everything from the beginning, and have cut out any unnecessary work, there should be no surprises. If you fail to break down a large project into manageable chunks, there is every chance that you’ll struggle to estimate the cost.
There is a higher chance that work will deviate because of the lack of detailed planning, leading to higher than expected costs. But not so with a well-planned work breakdown structure.
Let’s go back to the first example we used around building a new store. When setting up your project, you’ll consider the three portions and detail everything that each entails. Once you have accounted for everything - broken everything down into workable portions, you’ll know what resources you need to allocate to which section to ensure you complete the project on time.
It advances overall accountability across your team
We mentioned in an earlier example in this article that when setting up your work breakdown structure you’d include the people responsible for specific portions of the project.
Because you set out who needs to do what to ensure the successful completion of the project, there should be no confusion. In this way, a WBS advances any accountability.
A space planner, for example, will know that you’ve tasked them with creating planograms for a half dozen categories with the Non-Edible department. If your project fails because the planogram isn’t complete, you’ll know who to speak to, to correct the issue.
It’s the same with any other part of a given project. There are timelines, budgets and tasks that all work together to ensure a successful project. And you need to hold people accountable for all of it.
A WBS also allows for clearer communication, a point we made in an article on project planning. By planning everything out, you lay the foundation for a workforce that knows what you expect at any point during the project.
More than that, it allows your team members to understand where their work fits into the project as a whole. That allows them to see that what they’re doing impacts the whole project.
It helps you to identify and manage risk
Considering that your average work breakdown structure is displayed graphically, you can understand each step of your project.
The benefit of this is that you can also identify any possible risks before they happen. In reality, you could even redesign your project to cut out potential risk. Of course, that is not always possible. There may be a step or task you need to complete and with an associated risk. In that case, you’d need to manage it.
For example, you might know that when building a planogram, there is a possibility that your space planner might not have a complete range. To assist them, you’d then want to ensure that the retail buyer has given sign off before your space planners begin.
By knowing that there is a strong possibility that something like the above would happen and having a way to bypass it to ensure little to no frustration, you’re able to ensure the project remains on track and finishes when expected.
How do you create an effective work breakdown structure?
When it comes to a WBS, there are several characteristics that all successful structures have in common. Below are a select few - there are more.
The 100% rule
The 100% rule is an essential design principle for any work breakdown structure and applies at all levels.
The rule states that all the work and budget at the highest level of your WBS needs to total up to 100%. Then, on the next level, everything that is part of the portion needs to total up the percentage that you had decided on.
Let’s reconsider the example of building a new retail store.
We broke it up into three portions - Foundation (25%), Exterior (30%) and Interior (45%). Under Interior, you then allocate each task a specific percentage so that it all amounts to 45% of the overall project. You’d do the same for each of the other two portions so that the total work across each amounts to 100%.
If you have a third level, you’d need to be sure that all the work also adheres to the same principles. For example, under plumbing (5%), which is part of Interior, you’d want to ensure that every action that occurs makes up that 5%.
It’s also worth noting that you need to be careful not to overlap work across the various portions as this can lead to ambiguity and confusion.
Three levels are ideal
At some point, you need to stop dividing the work into smaller portions. As for when you should stop, experts agree that it’s best to have between two and four levels depending on the complexity of the project.
For most projects, three levels are sufficient. This allows you to properly divide out the time and budget without stretching it unnecessarily. As you attempt to add more levels, you could find yourself creating work that overlaps. Besides confusing, it can also lead to wastage, be that time, budget or both.
It is also linked to what is known as the 8/80 hour rule.
The 8/80-hour rule
While the 100% rule is an essential part of any WBS, so too is the 8/80 hour rule. This rule states that no single activity or group of activities must take more than 80 hours to complete. If it does, you must break it down into smaller work packages.
On the other hand, if a work package takes less than eight hours to complete, you need to include it as part of another deliverable.
Focus on the results, not actions
At a high level, you need to focus on the deliverables rather than the actions. There are good reasons for this.
Firstly, it makes it easier to manage the scope of your project. You don’t have to concern yourself with all the details. Secondly, it allows for flexibility. The team who needs to complete that portion of the project can approach it in whichever way they believe will help them complete the work on time.
Let’s take the category refresh as an example. At a high-level, you’d want completed planograms. As you dig into the details, you’d then consider the actions you need to take to get the result, which will help you to refresh your category.
When setting up your WBS and portioning out the work, you need to assign them to a specific team or individual.
Not only does this allow for accountability. If you’ve been meticulous when designing your WBS, you avoid the problem of overlapping work. Also, you’ll ensure clarity. Everyone involved in the project will know what they need to do to ensure the project is a success.
Activ8 is team management software for retail with project management functionality. If you’re interested in creating, managing and seeing successful projects through to completion, Activ8 is for you. Learn more by scheduling a demo with one of our sales consultants below.