Tag Archives: Value

To kill or not to kill……

Two linked articles on the free ‘Project Manager’ website discuss the reasons so many bad decisions are made about continuing or stopping projects and other business endeavors.

Avoiding sunk cost syndrome on your project.

How not to kill a project.

We will be taking both of these concepts forward in a few weeks.

Project or Management Failures?

Google ‘reasons for project failure’ and you get nearly 5 million responses! The question this blog asks is how many project failures are caused by project management shortcomings and how many failed projects were set up to fail by the organisation’s management?

The Project Delivery Capability (PDC) framework described in our White Paper Project Delivery Capability (PDC) offers a useful lens to separate the failings generated by project performance from those imposed on the project, inadvertently, or otherwise by organisational management.

The list below separates the root cause of failure into four categories based on this model:

Initiation: failures associated with project identification, business case development, requirements definition and portfolio selection; including establishing initial realistic time and cost budgets based on pragmatic risk assessments.

Project: failures associated with the project team failing to apply effective project management processes as defined in resources such as the PMBOK® Guide, ISO 21500 and PRINCE2

Support: failures associated with the lack of effective senior management support to the project (Capability Support), including inadequate sponsorship, failing to provide appropriate resources, inadequate business inputs, lack of direction/decisions and allowing excessive change.

Benefits: the failure to realise the intended value from the project’s deliverables associated with poor organisational change management, end use adoption and cultural resistance (for more on the overall scope of change see our White Paper, Organisational Change Management).

The table below is based on an amalgamation of dozens of lists found through a Google search.

Reason for Failure Cause
Inadequate business case
A good business case will clearly demonstrate the business benefit of delivering a project and define the objectives, requirements and goals.
Undefined objectives and goals
This is always a problem, if the organisation does not know what it wants, it is impossible to scope a project to deliver the ‘unknown’.
Inadequate or vague requirements
This is only a problem if the organisation fails to allow adequate time and appropriate contingencies in the overall scope of the project to define and firm up requirements. Defined requirements are essential for the project to be able to deliver a successful outcome.
Unrealistic timeframes and budgets; unachievable objectives
Fact free planning is always a problem. Initial ‘rough order of magnitude’ estimates need appropriate contingencies in the initial business case. The project outputs need to be feasible.
Lack of prioritisation and project portfolio management
Causing competing priorities leading to inadequate support and resourcing for projects.
Estimates for cost and schedule are erroneous
Estimates should be based on solid foundations. Unrealistic targets are unlikely to be achieved.
Initiation / Project
Failure to set and manage expectations
Unrealistic expectations are unlikely to be fulfilled. From the start of the initiation through the life of the project effective communication to set and maintain realistic expectations is vital.
Initiation / Project
Business politics
Lack of discipline within executive/senior management. Only present is the organisation is poorly governed and lacks a rigorous portfolio management process. Selected projects should be supported by management.
Initiation / Benefits
Cultural and ethical misalignment
Misalignment between the project team and the business or other organization it serves will inevitably cause problems.
Initiation / Benefits
Lack of a solid project plan
The failure to develop an effective project plan guarantees the project will fail. The type of planning required depends on the project methodology. Some specifics are included below
Poor estimating
Failing to use historical information, formulae, and questions to make sure that the estimate is not a GUESStimate.
Poor processes/documentation
Appropriate processes and documentation are essential for project success.
Poor risk management
All projects are inherently risky. Effective risk management reduces the degree of uncertainty to an acceptable level.
Overruns of realistic schedule and cost estimates
This is a project failing. Either due to poor management/motivation of the project team or poor risk assessment (leading to inadequate contingencies) or poor estimating.
Failure to track progress
Tracking progress against the plan and adapting performance is central to effective project management.
Poor Testing
Failing to adequately test project deliverables; including:
– Poor requirements which cannot be tested
– Failing to design a testable system
– Failing to develop a realistic and effective test plan
– Failing to test effectively with skilled staff
– Inadequate time and budget allowed for testing.
Poorly defined roles and responsibilities
The organisations management is responsible for defining roles and responsibilities in the overall management stakeholder community; the project manager is responsible for the organisation within the project team.
Project / Support
No change control process / Scope creep
A lack of effective change management processes is primarily a project failing, however, organisational management should require effective change management to be in place and support the change management processes.
Project / Support
Team weaknesses – Inadequate / incorrectly skilled resources
Having people who are ill-prepared to complete a task can be worse than not having anyone. The organisation is responsible for providing adequate internal resources for the project, the project is responsible for defined training and procuring appropriate contracted resources.
Support / Project
Lack of user input
The organisation is responsible for organising the necessary input from end users. The project is responsible for requesting and defining its needs and making appropriate use of the information provided.
Support / Project
Lack of management commitment / Lack of organisational support
The organisation is responsible for properly supporting the projects it has initiated.
Ineffective or no sponsorship
Ineffective project sponsorship is almost a guarantee of failure.
Poorly managed – project manager not trained/skilled
The organisation is responsible for appointing an appropriate project manager and providing him/her with appropriate support, training and coaching.
Inflexible processes and procedures, templates and documentation
Any imposed process needs to be as light  as practical to meet the governance needs of the organisation without inhibiting the work of the project.
Insufficient or Inadequate resources / lack of committed resources
(funding and personnel)
The organisation is responsible for properly resourcing the projects it has initiated. If the resources don’t exist or are already fully committed elsewhere, this is an initiation failure; if they are simply not made available it is a support failure.
Support / Initiation
Poor communication / Stakeholder engagement
People tend to fear what they don’t know, therefore effective communication with stakeholders is vital if the project is to capture their support, and keep it. The project is responsible for project based communications; the organisation change manager (sponsor) is responsible for communication in support of the overall change initiative.
Benefits / Project
Poor or ineffective organisational change management
The organisation has to implement, accept and use the project’s deliverables to generate value. Failures at the organisational change level mean most of the planned benefits cannot be realised.
Stakeholder conflict
The organisation is responsible for properly supporting the projects it has initiated. This includes the ‘through life’ management of stakeholders starting prior to initiation and continuing through to the realisation of the
Inability or unwillingness to stop a project after approval
‘Death march’ projects destroy value. A key element of effective portfolio management is to stop wasting money and resources on projects that can no longer contribute value to the organisation.

Of the 29 causes of failure outlined above, only 7 are exclusively the province of project management. The other 76% involve or are exclusively the province of the organisation’s general and executive management as part of an overall ‘Project Delivery Capability’!

This overall capability of an organisation to realise value from an investment in a project starts with selecting the right project to do for the right reasons, then doing the work of the project effectively and efficiently, and then making effective use of the project’s outputs to create value. Mess up any of the early stages and there are no benefits to manage. If the organisation fails to implement the changes effectively, the potential benefits are not realised.

The project manager is only responsible for the bit in the middle – the ‘doing of the project’, a steering committee, sponsor or other management entity is responsible for the beginning and end parts of the overall process involved in PDC. Even the 24% of failures assigned to project management have a link back to the role of the Project Director within PDC. The organisation should provide oversight, training and support to ensure effective processes are used by their project managers and teams. Conversely, a skilled project manager may be able to overcome some of the organisational failings identified above; by managing upwards and operating effectively within the organisation’s political systems a skilled project manager can cover some failings, others are fundamental and will result in a failure regardless of the efforts of the project team.

Therefore based on this table, it is reasonable to determine PDC is an executive and general management responsibility. The ‘project governance’ requirement within PDC is for the Board to ensure executive and general management accept this responsibility and excel in creating value for the organisation.

Based on this assessment, my personal feeling is we as project practitioners need to stop referring to ‘project failures’  every time a project fails to deliver the expected value and start talking about ‘business failures’ when the organisation’s  management fails to effectively manage or support the work and as a consequence, fails to achieve the intended/expected value.

Black Swan Risks

A black swan???

Black swans are becoming popular in far too many places! Not too many people would confuse Daffy Duck with a black swan but when it comes to risks, it seems too many people are prepared to accept anything with black feathers is a black swan….

I have just finished a really interesting discussion with Bob Prieto on the subject. Bob’s article in January’s PM World Today discussing ‘black swan risks’ and my letter to the editor in the February edition set the framework (the PMWT website has closed).

The key definition of a ‘black swan’ proposed by N.N. Taleb is that the ‘black swan’ was unpredicted and unpredictable, but in hindsight it appears that it should have been foreseeable. Birds have a range of different plumages, there is no reason not to presume swans could not have other colours but equally, but in the 18th century, there was no reasonable basis to assume swans would be anything but ‘white’ (view links to further discussion).

Another black swan...???

Following on from the debate, the challenge I see facing management is in two parts firstly providing sufficient rigour in the assessment of risks to encapsulate most of the reasonably foreseeable risks and making appropriate decisions based on a proper understanding of the issues. The key issue in the 2000 Ericsson semiconductor factory fire highlighted in Bob’s article was not the fire, it was the single source of supply, creating a critical single point of failure. Many events: fire, earthquake, industrial, environmental and dozens of other causes could have shut down the factory. Add all of the individual low risk occurrences together and the likelihood of the factory being out of business starts to increase. This seems to be exactly the same scenario that played out in the BP Deepwater Horizon disaster. The compounding effect of multiple individual decisions caused the disaster. Any one decision on its own was probably OK, the combination was not. Understanding the whole cannot be based on rigid rules the interactions are far too complex, Practical Wisdom  is needed.

The second is building adequate resilience into an organisation to cope with both the accepted high impact low probability risks and the unknowable unknowns that are genuine ‘black swans’. This involves having some spare capacity and some rehearsed disaster management processes. This may not be 100% cost effective but the damage caused by having no capacity to deal with major problems is far worse.

Real black swans

The final thought is ensuring you have an effective system for watching the environment to identify as early as possible the emerging problems. As Josh Billings said “It ain’t so much the things we don’t know that get us into trouble. It’s the things we know that just ain’t so!”  The idea of Black Swans is a valuable concept that warns us to expect the unexpected even after we have implemented effective risk management! The only certainty is uncertainty, and we need to remember that we will continue to be surprised even if we have implemented the most effective risk management strategies. For more ideas and resources, visit our Practical Risk Management page.