Prevalence of “Challenged” Projects

Then comes the day you did not anticipate.  Your manager calls you into the office and tells you about your next assignment.  There is this lousy project.  It is missing most of its deadlines, overrunning the budget, the project performance is not good, and the customer is irate.  You are to take over the management of this project --- and fix it!

Welcome to the world of high-performing project managers who are often rewarded by being called upon to “Recover Challenged Projects.”  What you immediately realize is that this world is very different from what you are used to because you are stepping into an existing project rather than starting from scratch – an existing project that is on life support.

Recent PMI “Pulse of the Profession” studies have shown the following percentages related to various aspects of project failure:

• Did not finish within initial budget: 47%
• Did not finish within initial schedule: 51%
• Experienced scope creep or uncontrolled changes to scope: 45%
• Lost budget upon failure: 32%

In a Standish CHAOS summary report of over 10,000 software projects, it was found that while the use of new Agile project management techniques reduces the percentage of challenged projects, the difference is only 8% (52% of Agile projects are challenged, 60% of waterfall projects are challenged).

Projects fail for a variety of reasons including (1) Overstating capability and expectations, (2) Poorly understood requirements, (3) Disengaged sponsor, (4) Scope not clearly defined, (5) Project management discipline failure, and (6) Communication failure.

 The Process of Project Recovery

While every project recovery effort is unique, with different demands, there is a general process that should be considered to bring a project back on track.  The first step is to understand and promote the following goals:

• Enter into a troubled project with no prejudgment or bias.
• Your objective is to achieve a definite path to recovery
• Avoid major (further) trauma to the current project team and stakeholders
• Uncover the key issues that contributed to the challenged condition
• Recover as many of the project’s original objectives as possible

With these goals in mind, there is a very basic life cycle approach that should be followed.  It includes four phases that often represent what was missing in the first place.

These phases are:

ENTERING

• Develop Scope of Work
• Schedule and Conduct Initial Interviews and Data Gathering

ANALYSIS & ASSESSMENT

• Documentation and Data Review/Evaluation
• Probative Interviews
• Develop Conclusions and Solution Approach
• Gain Approval - Consensus

EXECUTION & CONTROL

• Execution Planning
• Roles & Responsibilities Determination
• Schedule and Budget Development
• Project Controls Strategies in Place
• Deliverable Execution and Validation

CLOSING

• Solidify the Transfer, Handoff, and Implementation Plans
• Execute Phase Implementation
• Execute Project Signoffs
• Final Audits and Lessons Learned

Entering into a Challenged Project

The first thing to realize as you enter a challenged project is that you are not starting with a “clean slate”.  You are stepping into something that is well along and struggling.  In order to make a positive impact, it requires professionalism, patience, insight, tact and critical thinking.

You will want to immediately establish yourself as taking a “consultant’s” approach, rather than coming in as the “expert”.  That means that you will be perceived as collaborative, working with the project leadership and making decisions bilaterally.

In this early stage be sure to take the time to structure and plan the recovery effort in the same way you would plan a new project.  But in this case the starting point involves conducting interviews and reviewing data.  By doing so, you will get a read on the various stakeholders’ thoughts on what has been happening.  Each will have a story to tell, but you want to avoid getting hooked into the emotion of the situation.  Avoid getting “sold” too early on any version of the events.  However, always approach the interviewing with a sense of compassion.  In most cases, the project team has been working very hard, trying to make the right choices.

In the data gathering look for performance vs the baseline project plan.  Identify significant performance gaps and begin to understand individual performance issues.  You will almost always see project plan deficiencies.

Analysis and Assessment

During this phase the preliminary data review and interviewing that occurred in the Entering Phase will be further enhanced by conducting “deep dives” in areas of interest.  Some common distress factors typically seen are:

• Ineffective and untimely senior management decisions
• Ineffective expectations transfer from client to provider (contract terms misunderstood)
• Ineffective Stakeholder Communication
• Lack of Execution Planning
• Lack of Scope and Design Basis Freeze prior to final estimation or definitive contract terms
• Project or Program is beyond the experience level of the Project/Program Manager
• Inadequate project structure and/or resources

The initial interviewing in the Entering Phase will reveal discrepancies.  Thus, in this Analysis phase probative interviews may be necessary to explore these discrepancies.  Probative interviews can be a bit more intense as you probe areas where individuals have been reticent to reveal the whole truth.

There are various useful root cause analysis tools that can be used to analyze the performance data you assemble in this phase.  Included in this tool set would be gap analysis, why-why analysis, and barrier analysis.  Regarding cost and schedule, a burn rate or earned value analysis can be utilized.  Finally, a review and update of the risk assessment may be helpful.

One of the most difficult tasks at this point is the evaluation of team dynamics.  Questions to be explored include:

• Is the project beyond the experience & capabilities of the project manager?
• Is the project manager “leading” the team…is the team aligned?
• Are there any current personality conflicts with the project manager?
• Does the team have the proper “leads” based on the project’s key deliverable areas?
• Are the leads aligned with the overall project strategy?
• Are there any “weak links” in critical tactical roles?

It is always best to retain as much of the original project team as possible.  Removal and ramp-up of key resources usually results in a significant schedule push in and of itself.

Finally, in this phase is the development of the recovery approach.  You will now feel like you are beginning to settle in to the typical project planning process.  As such, it is important to resist the urge to jump to the solution before completing the due diligence of the Entering Phase and Analysis & Assessment.

Once the up-front data gathering, interviewing, root cause analysis, etc. has been adequately completed, then it is usually very clear what the approach to recovery must address.  Now a revised project plan can be assembled and executed.  All of the original project objectives may not be able to be accomplished.  And most likely the cost budget and schedule will need to be revised.  The recovery plan should be validated and approved by key executive management.

 Execution and Control for Recovery

It is now time to move forward with the execution of the recovery plan.  Many of the execution plan elements shown below will be in your plan:

• Project Management
• Risk Management
• Communications Management
• Quality Management
• Design Management
• Information Management
• Resource Management
• Procurement Management
• Security Management
• Controls (Scope, Time, Cost)
• Quality - Testing - Validation
• Implementation - Closeout

Closing

A few items related to the execution plan that are especially critical in project recovery efforts include the following:

• Ensure that the project requirements have been thoroughly reviewed for adequacy and that they are all being addressed. Some studies have identified inadequate requirements as the primary cause for project failures.
• Not only must the right team be in place, but their roles & responsibilities must be clearly defined. Also, be sure to address any negative organization culture issues with the team.
• Schedule and budget control are more critical than ever. A second project recovery effort must be avoided at all costs.
• The updated risk assessment plan must be monitored weekly to ensure all known risks are mitigated.

Risks and Assumptions

The opportunity to lead a project recovery effort was your reward for being a high performing project manager.  By effectively “Entering”, “Analyzing and Assessing”, and “Executing and Controlling” the project recovery effort, you will come upon your second reward – a recovered project that meets all revised and accepted objectives.

A final word about the destiny of challenged projects.  The recovery plan is often influenced by the relationship between cost of recovery and business value.  If the cost of recovery is high and the business value is low, then a decision may be made to exit or terminate the project.  Other options are:

• The project is transformed to meet new objectives. (high recovery cost and high business value)
• The project is reprioritized, perhaps being absorbed into another project. (low recovery cost and low business value)
• The project is salvaged through rescue or partial recovery. (low recovery cost and high business value)

Each of the above cases can be effectively accomplished by the process outlined above.

"The greatest accomplishment is not in never falling, but in rising again after you fall."

Vince Lombardi

Research:

1. “Managing Project Recovery”, Dhanu M Kothari, Romeo Mitchell, 2007.
2. “The Frontiers of Project Management Research”, Dennis P Slevin, David I Cleland, Jeffrey K Pinto, 2002.
3. PMI “Pulse of the Profession”, 9th Global Project Management Study, 2017
4. “Professionalizing Business Analysis: Breaking the Cycle of Challenged Projects”, Kathleen B Hass, 2008.

Written by Ed Santavicca, MS, PMP