Today businesses manage projects within increasingly complex environments driven by changing customer/business needs and organisational restructuring. New product development, post M&A integration, outsourcing and policy changes, system development and implementation, are amongst the key project initiatives organisations must manage.
In our current fiercely competitive and ever changing business world it’s impossible to imagine an organisation that is not engaged in some type of project activity.
The incidence and cost of failure is high. How can we ensure we manage projects to successful implementation?
What Is Project Management?
“Project management is the discipline of planning, organizing, motivating, and controlling resources to achieve specific goals.” Wikipedia
“Project management, is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It’s a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets.” Project management Institute
Project Management is a simple concept to; analyze a problem define a solution, identify the cost and secure funding, make a project plan, assign resources, track the project against the plan.
The concept of project management seems simple enough, however the rate and cost of failure is incredibly high.
The High Cost of Failure.
A study by PricewaterhouseCoopers (PWC), which reviewed 10,640 projects from 200 companies across 30 countries, found that 97.5% the companies did not successfully completed 100% of their projects. A study published in the Harvard Business Review, which analyzed 1,471 IT projects, found that the average overrun was 27%, but one in six projects had a cost overrun of 200% on average and a schedule overrun of almost 70%. And we all have heard about large construction projects — the Channel Tunnel, Euro Disney, and Boston’s “Big Dig” — that ended up costing almost double their original estimate.
The cost of failure for these large infrastructure projects often comes down to time and money, however there are other costs that are far harder to quantify;
The seven deaths resulting from the Columbia Shuttle disaster have been attributed to organizational problems, including a weakened safety culture at NASA.
The failure of the FBI’s Virtual Case File software application cost U.S. taxpayers $100 million and left the FBI with an antiquated system that jeopardizes its counterterrorism efforts.
When it comes to change management projects the cost of failure although hard to quantify flows into all facets of the business. A failed project can significantly impact; the business culture, the talent pool as dissatisfied employees leave or simply lose faith in the business, the customer base as employee morale overflows into the service of our customers.
Ensuring Success Isn’t Easy.
There is plenty of information out there regarding projects that fail, identifying a set of criteria for success is a lot harder than it may seem.
The major certifications like PMBOK and PRINCE highlight the main skills required in project management. They provide framework and guidelines across both process steps and knowledge pools:
Process Steps: Project Start Up, Planning, Execution/Directing, Control, and Closing.
Skills: Integration, Scope Management, Time Management, Cost Control, Quality Control, HR Management, Communications Management, Risk Management, and Management of Stakeholders.
These skills are essential for a successful implementation, however as we saw earlier even with all the advancement in Project Management techniques and knowledge there are still significant project failures.
Gartner’s study found that the length and complexity of a project significantly increases it’s risk. They found that IT projects over $1m are 50% more likely to fail.
Other success factors include; tight budget control, ensuring schedules are realistic, and regular project status reviews.
PWC have in their comprehensive global study identified that Project Management Maturity is a key component of success. Organizations with qualified, experience project management staff, following a mature methodology, and have strong development programmes for project managers are almost 80% more likely to succeed.
One of the main components that is often overlooked in the academic studies of project management is PEOPLE.
We must remember that all projects = change, and often change = fear. Engagement of people affected by the project is crucial for success. (For more on engagement see our previous blog Promoting a Value-Added Culture)
Managing people’s attitudes throughout the change cycle is crucial to success, whether it be the communities’ expectations in a large new shopping complex development, or customers’ expectations during a Merger and Acquisition, or employee expectations through a new system implementation, the successful management of these expectations will make or break a project.
Managing the emotional cycle throughout change.
Set Yourself Up For Success
1. Set a clear success criteria that can be measured in very short intervals (weeks rather than months)
2. Assess your organization’s Project Management Maturity
a. If your organisation does not have a great track record of successful projects of this type find a business partner that does
3. Choose your Project Manager carefully
a. Ensure they are adequately trained and experienced for the type of project you are running. If not supplement with external business partners.
b. Ensure they have adequate soft skills
i. People person / Influencer
ii. Time management
iii. Team player
iv. Conflict management
4. Invest in your PMO – ensure they are adequately skilled and are learning from each project’s successes and failures
5. Plan the people aspect of the project. “People will make it happen”.
a. Who will be impacted
b. Set expectations of all affected
c. Communicate regularly
d. Identify influencers within the impact groups and ensure you bring them on the journey
6. Ensure sponsors have the right skill and authority to push the hard decisions when they do come up. Make sure they are fully engaged.
If you can do all 6 of these things well the execution of your project is much more likely to succeed.
PWC Global Project Management Survey – Insights and Trends: Current Programme and Project Management Practices* http://www.pwc.com/us/en/operations-management/publications/pwc-global-project-management-survey.jhtml
PMI PMBOK www.PMI.org