International Business: Control and Evaluation. Unit 8 - Performance Measurement and Evaluation

 

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How to Create Gantt Charts in Excel

 Microsoft Excel remains the go-to option for many businesses to perform data calculations and create charts based on the results.

Doug Bonderud

The Gantt chart is a useful guide that isn’t naturally available in Excel. Great for project management and milestone tracking, Gantt charts can help companies better visualize operations and streamline current processes.

In this piece, we’ll dive into the basics of Gantt charts and explore their benefits, then provide a step-by-step guide to creating them in Excel, along with some useful examples. Before long, you’ll be able to use Excel like a pro.

What are Gantt charts?

On the left-hand side, the Y-axis of the chart lists specific activities. At the top, the X-axis of the chart shows time.

There’s no fixed unit for time — it could be measured in weeks, days, hours, or minutes, depending on the tasks you’re tracking. In Excel, each task gets its own row.

As you can see in the example above from Microsoft, task 1 starts at time unit 0 and runs until just before task 2, which proceeds until task 3 begins.

It’s worth noting that tasks can overlap — the purpose of the Gantt chart isn’t to determine the order of tasks but to provide an easy way to see what’s happening, when, and how many processes are happening at once.

The Benefits of Gantt Charts

Gantt charts offer several benefits, including the following.

At-a-Glance Project Progression

Gantt charts let you see when projects began, how far along they are, if they’re reached specific milestones, and if they overlap with other projects.

This makes it possible to better understand how long processes will take and if concurrent processes may cause friction.

Actionable Insight

These charts also provide actionable insight for project management staff. Because teams can see project start dates and timelines at-a-glance, they can pinpoint potential bottlenecks and make changes.

In practice, teams might discover that three processes are due to start on the same day. By staggering start dates slightly, they can avoid possible performance issues.

Improved Time Management

Consider a Gantt chart showing multiple tasks with the same start date and team responsible for them. If left alone, this project framework could waste time, as one team is overworked, and others may not have enough on their plate.

A better understanding of what’s happening, when, and why can help companies improve their time management.

Reduced Risk of Resource Overload

Projects share a pool of finite resources. The more projects happening simultaneously, the bigger the resource drain and the greater the risk of resource overload.

Gantt charts offer a way to compare process resource needs and make adjustments that help keep projects on track.

While every Gantt chart differs, common features include task, taskbars, and milestones due dates. Charts may also include sub-task bars or use bar shading to indicate how far a task has progressed.

How to Create Gantt Charts in Excel

Despite their usefulness and ubiquity, Gantt charts don’t have a built-in template in Excel. As a result, users need to either download a pre-built Gantt chart or build their own.

Here’s a step-by-step guide to creating a Gantt chart in Excel.

1. Enter your project data.

The first step in creating a Gantt chart is entering project data into a typical Excel spreadsheet. In our example, we will enter three data columns: Task Name, Start on Day, and Duration. The result should look something like this.

2. Make a stacked bar chart.

Next, we’re going to create a stacked bar chart. To do this, select the data in the Start on Day column (with the header). Then, under “Insert,” select “Bar Chart”, then “2-D Bar”, then “Stacked Bar” to get this.

3. Enter your duration data.

To enter duration data:

• Start by right-clicking on the chart.
• Choose “Select Data.” This will open a “Select data source” window containing the “Start on Day” series.
• Click the “Add” Button under “Legend entries (series),” then name your new series Duration.

Now, click the icon next to where it says “Series values,” which will open a new “Edit series” window.

Select the data from your Duration column (without the header) and your Start On Day column, then click OK to close the window, and click OK again to add the series to your chart.

4. Add your task descriptions.

Now we’re going to add task descriptions. This starts the same way as the last step: Right-click on your chart to open the “Select data source” window, then select “Start On Day” in the left-hand “Series” list.

Next, select “Edit” on the right “Category” list. This will open an “Axis labels” window. Select the cells in your Task column, then click OK on the “Axis labels” window, then OK on the “Select data source” window.

4. Fix the Order

Finally, we’re going to fix the order of our tasks. To do this, right-click on the list of Tasks on the left side of the chart to open a menu, then click “Format Axis.” From this menu, under “Axis Position,” check the “categories in reverse order” box.

And there you have it — a custom-built Gantt chart in Excel.

Gantt Chart Examples

If you prefer to download an existing template, there are multiple Gantt options in the Microsoft chart templates database. Some great Gantt examples include:

Date Tracking Gantt Chart

This Data Tracking Gantt chart template is completely customizable with your own images, titles, and text. It offers an easy way to track key tasks without having to build your Gantt chart from the ground up.

What we like: This Gantt chart is simple and streamlined. It has plenty of room for tasks, start dates, and durations to help you better manage tasks.

Simple Gantt Chart

This Simple Gantt chart is exactly that: Simple and easy to understand. It can also be tailored to different user groups, such as employees, managers, and stakeholders. You can include photos, graphics, or new fonts.

What we like: In addition to basic task information, this chart also adds the ability to break projects down by phases (denoted by the different-colored sections) and who is responsible for each task.

Agile Gantt Chart

This Agile Gantt chart example provides color-code task categories and visual reminders to help Agile teams meet deadlines.

Given the ongoing feedback loop that underpins Agile methodology, Gantt charts such as this are instrumental in task tracking.

What we like: The color-coded bars provide immediate visual feedback, while the ability to quickly publish and share this chart in Excel helps improve team collaboration.

Going the Distance with Gantt

Gantt charts are a great way to track project schedules and see at-a-glance where overlaps occur and where it may be necessary to make schedule changes.

While Microsoft Excel doesn’t come with a built-in Gantt generator, you can go the distance with Gantt charts by building your own from scratch with our step-by-step guide or downloading an Excel template that lets you customize data and headings on demand.

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What Should Your Company Measure Besides Financial Results?

 

By Will Kaydos

Most people don’t recognize that performance measurement lies at the heart of the improvements we humans have made in our standard of living in the past few centuries. That’s because almost all of the gains can be linked to using the Scientific Method to determine cause-effect relationships – and that requires measurement.

For example, bloodletting to cure illness was a common practice in many cultures for over 2000 years until Pierre Louis used measurement to show the practice did not increase recovery rates (circa 1850). Although his discoveries were not quickly adopted, they eventually led to discontinuing this worthless, and potentially harmful, procedure.

Until Louis came along, everyone “knew” bloodletting worked because some people did recover after being drained of several ounces of blood. Sure, some died, but when that happened, the rationale was that the person was just too sick to be cured in the first place. It’s hard to argue with that kind of thinking unless, like Louis, you have the data to prove otherwise.

But are things so much different today? They certainly are in the scientific community, where rigorous substantiation of theories by sound data is always required. The business community, however, is nowhere near as disciplined. Some companies have excellent measurement systems, but many are still in the Dark Ages when it comes to their executives and managers having the measures necessary to understand how their business works, how it is performing, and why it is performing as it is. Like tenth-century physicians, managers in these companies are making decisions based on subjective information, anecdotal evidence, and beliefs about what drives results that are simply not true.

As Pierre Louis demonstrated, when it comes to identifying cause-effect relationships, nothing beats measurement – and the same is true about identifying business problems and opportunities. So what should a well-managed company measure besides the usual financial results?

Measurement frameworks

The Balanced Scorecard is currently a very trendy (and often misunderstood) topic in business circles, but there are other measurement frameworks such as the Performance Prism, the Quantum Performance Management Model and the Tableau de Bord. All are useful, but none of them is the answer to everything despite what their advocates may say.

Combining elements of various measurement frameworks yields the measurement model below. It works as follows:

1. The needs and expectations of customers and stakeholders are the primary drivers of strategies. Stakeholders include shareholders and employees, but suppliers, the community, government entities and other organizations could also be important stakeholders.
2. Strategy consists of defining your intended customers and how you are going to compete for them. A company’s strategy is made up of individual strategies, which are the key actions a company must take to achieve its vision and goals. When developing strategies, all other elements of the model must be considered.
3. Operations include all direct and support business activities that execute strategies and produce products and services for customers and stakeholders.
4. The capabilities of a company’s organization and infrastructure enable its operations to efficiently satisfy customer and stakeholder requirements. Stakeholder capabilities may also be important to a company’s operations. In the short-term, capabilities can limit what strategies are feasible; in the long-term they may need to be developed to implement certain strategies.
5. Stakeholder contributions include products or services that are essential to operations. For example, suppliers may provide critical technical support for designing products.
6. Products and services provided to customers create financial returns (7) for shareholders and perhaps other stakeholders as well.

Note: For public sector organizations, the model is similar, but customer and stakeholder satisfaction become the primary desired outcome, not financial returns.

Critical questions executives must answer

Using this model, we can develop the critical questions executives must be able to answer about their company and the performance measures that apply to each question.

CUSTOMERS

1.  Are we satisfying our customers?

• Customer satisfaction and dissatisfaction
• Customer retention and behavior

STAKEHOLDERS

2.  Are we satisfying our shareholders?

• Financial returns to shareholders

3.  Are we satisfying our other stakeholders?

• Stakeholder satisfaction and dissatisfaction
• Stakeholder retention and behavior

STRATEGIES

4.  What is happening to our customer base?

• Market potential
• Market growth rate

5.  Is our company strategy working?

• Market share
• Customer acquisition
• Customer profitability
• Product/service profitability
• External factors that affect customers

6.  Are our individual strategies being properly executed?

• Strategic goals and the objectives necessary to achieve them.

OPERATIONS

7.  Are we serving our customers and stakeholders effectively?

• Product and service quality

8.  Are we operating efficiently?

• Process quality and capability
• Productivity
• Waste
• Product and service costs

STAKEHOLDER CONTRIBUTIONS

9.  Are stakeholders contributing what they should?

• Stakeholder resource contribution
• Stakeholder contribution quality

CAPABILITIES

10. Are we developing the abilities we need to ; execute our strategies?

• Organizational capabilities
• Infrastructure capabilities
• Stakeholder capabilities

This is a simplified picture of what should be measured at the executive level of any company. There are some overlaps among the questions and measures as well as many finer points that won’t be discussed here, but this overview is consistent with what leading companies are measuring.

The importance of market share

Many would say market share is the most important measure, because if you’re losing market share, your competitors have an advantage and they will soon eat your lunch. Market share won’t tell you how to correct the problem, but it will tell you when you are getting into trouble.

For example, Kmart was losing market share to Wal-Mart way back in the ‘70’s, but Kmart’s management failed to heed the warning – apparently because the company was still growing and profitable. Although Kmart eventually made some changes to its strategy, it was too little, too late. Now it’s a Chapter 11 “blue-light special” and the chances of it regaining its market position appear to be somewhere between zero and none.

Measurement and business success

All of the listed variables can be measured to a useful degree of accuracy and some companies are doing it. Companies that have won the Baldrige Award or similar state award have extensive measurement systems that include all of the above measures.

In reviewing numerous Baldrige-based quality award applications, I have found that a good estimate of a company’s final score can be made by just examining the measures being used. Why? Because the depth, breadth and underlying logic of a company’s measures reflect management’s understanding of the business and how well it is being managed.

Not surprisingly, over a five-year period ending in 1998, the winners of Baldrige and similar awards did two to three times better than comparable companies in terms of their growth in sales and operating income. That is a huge difference!

Determining what to measure

So how can you determine what your company should measure? As mentioned before, there are several frameworks that can be used. Although they all have merit, some have advantages in terms of their state of development, ease of use, and direct relationship to common business practices.

I believe the best approach for developing company or business unit strategy and related measures is to use the Balanced Scorecard methodology in conjunction with the robust perspectives of the Performance Prism. Balanced Scorecard performance systems have an established record of success, but one needs a disciplined way of building and implementing the system to ensure that business strategies get executed and that the necessary organization culture change gets implemented. One framework that is becoming an international “best practice” is the Balanced Scorecard Institute’s Nine-Step Methodology for developing strategic themes, business strategies, strategic goals, strategy maps, performance measures, targets, and new initiatives. The result is a strategic management system that is comprehensive, logically sound, and supported by the whole organization.

This does not assure the strategies will work, but the measures will provide timely feedback about how well they are working so timely corrective action can be taken regarding the strategies or their execution. Without the measures, a company’s strategy and finances could get substantially off-track before any problems are even recognized.

But having good strategies is not enough to be successful. Operational excellence is also needed to execute them. To achieve and maintain high levels of productivity, quality, and customer service, comprehensive operations or process measurement systems are needed to manage processes, departments and work units. These systems would include the measures that are strategically important, but those measures alone are insufficient for effectively managing operations.

For developing operational measures, I recommend the approach and model given in my book Operational Performance Measurement: Increasing Total Productivity. No doubt I am biased, but the book’s process measurement model is the only one I’ve seen that meets three critical criteria: it is logically sound, it readily relates to real world processes, and it has a record of successful application. The model is also consistent with TQM and Six Sigma methodologies that contain many specialized techniques for measuring and managing processes.

Becoming familiar with the Baldrige Criteria for Performance Excellence is also recommended. Since it outlines general management best practices, it provides a very helpful perspective on what a well-managed company should be measuring, as well as what it should be doing.

Cascading measures

Corporate level measures are very important, but they aren’t going to have much impact unless they are cascaded all they way down to front-line employees. The case for cascading is simple: Do you want 10% of your employees working toward company objectives or 100%?

With some exceptions, such as market share, what you measure at the top is what must be measured at all levels. However, the specific measures will change with every function and organizational level because managers doing different jobs need different information to make different decisions.

The same methodologies used to develop measures at the corporate level can be used to cascade the measures down to front-line managers, supervisors, and employees. However, as you go down the organization chart, the focus is on operations or processes. Strategy is incorporated into operational measures by giving more weight to the measures that are strategically important. This communicates strategy to all employees by translating it into operational terms – a primary objective of the Balanced Scorecard.

Implementing performance measures

Determining what to measure can take considerable effort, but it will probably be less than one-third of the total effort required to implement an efficient and effective measurement system. Data collection and processing systems will have to be implemented to produce the measures; everyone will have to be trained in using the systems and measures; and as the measures are used, some problems are sure to be identified that will require changes to the system.

Perhaps the greatest challenge faced when implementing performance measurement systems is changing an organization’s culture. Using performance measures requires managers and employees to change the way they think and act. For most people, this is relatively easy, but for some, changing old beliefs and habits is very difficult.

Overcoming such problems requires strong leadership to provide appropriate direction and support. The best measurement system in the world will yield few benefits if the right knowledge, skills, abilities, and values are not developed in a company. An organization doesn’t just interface with a measurement system; it is part of the system.

Developing and implementing effective measurement systems requires leadership, commitment, and hard work. Some investment is required, but it is small relative to the key benefits of a well-designed and implemented measurement system:

• The ability to determine if sales and profit problems are caused by strategies, operations, or both;
• Early identification of problems and opportunities;
• Increased productivity, quality, and customer service;
• A clear understanding of what drives financial and operational performance so resources can be allocated to the areas of greatest return; and
• A cohesive organization working toward common goals.
• No matter what approach you use to develop performance measures, bear in mind that the objective is not to have a Balanced Scorecard, Performance Prism or some other type of system, but to have the measures in place that will enable managers at all levels to answer the ten key questions given earlier.

If all of your managers can readily answer those questions about their areas of responsibility and support their answers with objective numbers, your company has the performance measures it needs. If they can’t, some of the “good” decisions they are making are undoubtedly not very effective – and they may even be harmful.

Sounds a lot like practicing bloodletting, doesn’t it?

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