Clients certainly know what failure looks like at the finish of a project – there is typically some issue that could have been better managed during the delivery. And in hindsight, most of those issues were in fact known to the client at the start of the project. The problem is, the Project just didn’t articulate all of the issues, and so wasn’t able to ensure they were all appropriately addressed.
This isn’t just our opinion. A Project Management Institute research project looked at over 2500 international projects over the last five years, and considered whether or not they were “successful”. The research found that, on average, 44% didn’t meet all their strategic goals! And 25% exceeded their budgets!
In 2014, PMI estimated that this cost clients US$109million for every US$1billion spent.
Have a look at the figures in Table 1.1 from the 2013-14 NSW Treasury Papers below:
Locally (if the Project Management Institute is correct) the State of NSW is likely to put at risk (and maybe, waste) over $6billion of its $59.7billion Infrastructure Budget over the next four years. The truth is, it’s probably worse than that. So how much of your capital budget can you afford to waste? Would 10% be OK?
“Success” begins with considering all of the strategic reasons for undertaking the project at its start.
Let’s look at a simple example that we think makes the point.
A state highway repair project used the available maintenance funds to heavily patch repair the worst bits of a failing road surface, and did a good job of those repairs – the worst potholes were gone.
But the corporate strategy was to use maintenance funds to reduce the roughness of the ride that vehicles experienced. Heavy patching is inherently bumpy because of the joins, so the road surface was still rough after the funds were spent. The Head Office annual review was scathing – because the cost effectiveness of the maintenance budget didn’t match the specified performance indicator.
Now, that’s not to say heavy patching was the wrong decision – it probably was the correct technical decision – it just didn’t match what the client (in this case, Head Office) wanted, or valued! The outcome of a smooth ride was “invisible” to the staff planning the maintenance work, and so went un-considered, with Head Office regarding 100% of the maintenance spend “a failure”.
Success must be articulated at the conception of the Project – a shared understanding with a clear statement of “where you want to be at the finish” must be matched with all the original reasons for undertaking the Project. You’ll find the principal reasons in the Project’s Business Case, but our experience is that there will be more (those “invisible” outcomes).
Performance indicators need to reflect the stated AND the invisible project outcomes. And the selected indicators must provide management with sufficient warning signals that you need to act. Otherwise, your project runs the risk of being counted amongst PMI’s 44% that miss their goals.
Too often, we see projects that have already passed their point of no return, and so from here on, it’s just going to be damage control. On probability alone, if you are in project management, you have had that experience.
If these ideas seem on the right track to you, give me a ring and we can discuss the ways available to make sure the project starts with all its outcomes visible, attainable and monitored.
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