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Troubled Projects Part I: The Design Factors

by Rob Cimini

How do projects become troubled? Typically there are two paths – by design and/or by steady decline during project execution. By design means just what it suggests – the project is headed for trouble due to deficiencies in the project management methodology or its application. In a study done by Guttman Development Strategies, 80 percent of respondents indicated that poor project performance was due to a lack of project management skills; research by Gantthead, a major project management firm, found that project managers with inadequate skills were the number one reason for project failures.

In the face of such growing evidence, the need for project managers trained and experienced in proper practices and having the general management skills to effectively apply those practices remains unrecognized in many organizations. But attention to this vital position is the primary means of avoiding what we term the troubled project design factors. And it starts right at project conception.

The Foundation for Project Success – Formal Initiation

Soundly managed projects begin with a rigorous initiation process. Neglecting this process simply sets the stage for oversights to surface later in the project as potentially significant obstacles or, worse yet, revealing an unjustified project. Choosing a Project Manager with solid credentials in good project management practices prior to the start of the initiation process is critical to success at this stage. At a minimum, a comprehensive initiation process should address the following:

  • Identify the key stakeholders for input including top management, end users of the project product, customer contacts and those responsible for project execution.
  • Confirm that the project has been justified based on business plan support.
  • Realistically assess high level resource requirements, both financial and human, and obtain management support.
  • Establish high level objectives, particularly cost and schedule, with sufficient input to make them realistically achievable.
  • Identify initial project constraints and assumptions and challenge for credibility.
  • Perform a preliminary risk assessment that addresses both business risk and project risk.
  • Create a written project charter summarizing the above content and agreed upon by the key stakeholders.

Not giving adequate attention to the initiation process can set the stage for the second factor, activity without measurable progress.

Activity or Progress? (Or Short-Circuiting the Planning Process)

Project initiation starts building the foundation for project success by providing the essential inputs for development of a comprehensive project plan. Resistance to developing and approving a formal project plan is often attributed to a lack of time and/or resources. But much like bypassing the initiation process, this approach is simply mistaking action for progress. Without the guidance provided by a well thought-out project plan, reactionary management typically ensues followed by a loss of control while the prospect of attaining the project objectives slips away.

The planning process need not be lengthy or drawn out but it must (1) be commensurate with the complexity of the project and (2) yield a plan that meets the following four criteria:

  • It must be formalized. This means the plan must be a controlled document that represents the map for guiding the project and not just accommodating a procedural requirement.
  • It must be bought into. Without the support and input from all the key stakeholders, there cannot be buy-in. And without buy-in, the potential for shifting or unrecognized expectations emerging within the ranks of the stakeholders increases, and with it the likelihood of a troubled project.
  • It must be approved. Formal approval through a signoff process helps ensure acknowledgement of the plan content thereby minimizing misunderstandings of what has been committed to.
  • It must be realistic. Each stakeholder is going to have their hallowed ground in any given project. However, insisting that the scope be completed within a rigid time frame that is not supported by detailed schedule development or withholding resources in order to achieve budget constraints imposed by the business plan do not make those objectives achievable. But they do put the project under duress from the start and set the stage for troubled project status.

A planning process that meets these four criteria is one step in establishing credibility in the resulting plan. The second is assuring the necessary content. While it is beyond the scope of this article to provide a guide on project plan development, examining plans using the following guidelines can help assure that the necessary project elements have been addressed.

  1. 1. Scope Definition: At the top of the list for good reason, a clearly stated scope document is the foundation for the project and should contain quantifiable (not qualitative) project objectives.
  2. Cost Management: Realistic allocation and estimation of resources is central to effective cost management. Additionally, contingency and reserve allowances should be allocated and justified.
  3. Schedule Management: The sanguine approach to task duration estimating can quickly take a project off track. And the interaction between tasks must be accounted for.
  4. Quality Management: What measures are in place to assure the quality of the project performance? That is, will the project satisfy the needs for which it was undertaken? Many companies have internal quality policies that can support this project plan requirement.
  5. Resource Management: It is vital to identify the roles and responsibilities among the project stakeholders. For example, who is going to be responsible for what deliverables in the project and in what capacity, i.e. direct participation, responsibility for outcome, review only, signoff, etc.
  6. Procurement Management: With outsourcing on the increase, this element of the project plan becomes increasingly critical. What are the criteria for qualifying suppliers and subcontractors? How are their activities going to be managed? Inadequate attention to this project activity is a key source of project trouble.
  7. Communications Management: Projects rarely get into difficulty due to a lack of technical competence according to a global study of nearly 10,000 projects at 35 Fortune 500 firms done by VitalSmarts. The study found that 70 percent of the project failures were related to communications issues. Robust and timely communication is a product of good management practices. And it starts with a plan – a plan that designates who needs what information when and how they are going to get it. Also, the plan must stipulate the use of effective reporting and action-oriented review meetings to monitor and control project performance.
  8. Risk Management: This element has been placed last not as an indicator of importance but because it warrants special attention as the third and final troubled project design factor.

Addressing Project Uncertainties (or Risk Management)

The absence of a formalized treatment of risk in a project plan can have enormous negative impact on the project outcome. Studies have identified that for companies reporting troubled projects, 90 percent are not doing risk management. But the growing competitive climate is driving more companies to adopt this valuable process. And clearly that wave of change is impacting the biopharmaceutical industry as the FDA has embraced these techniques through its initiative for quality risk management and advocating for adoption of the ICH Q9 guideline. But frequently there is reluctance to fully utilize this process in the project management environment.

Although often carrying a negative connotation, the essence of risk management is about preserving opportunity through a proactive management approach. Since ignoring project risks does not make them go away, similar to the fallout from poor project initiation practices, ignored risk events simply surface during the course of project execution and require a reactionary response. But the best intentions of applying risk management will yield disappointing results without proper implementation.

  • Risk management uses as its foundation the project plan and specifically a comprehensive definition of the project scope. The scope document provides the definition of activities that are then probed for uncertainties that can put the project objectives at risk.
  • Risk management is a dynamic process. Some risks are not identifiable due to time dependencies while others are progress dependent. So as the project life cycle progresses new risks become visible. Therefore risk management must be active throughout the life of the project.
  • Participation in the risk management process and development of response plans must be a team effort. It is not the sole responsibility of the project manager or any one team member. The greater the diversity of input, the more likely that the real project risks will be identified.

Regarding specifics on implementing risk management, the ICH 9 Guideline referenced above provides a general framework for a risk management process. A more detailed description of the process directed at validation of automated systems is found in the GAMP® 4 Guide. The ISO 14971 standard provides a risk management approach for the medical device industry. For a generalized standard directed at the project environment, the process is described in detail in the Project Management Body of Knowledge published by the Project Management Institute.

Failing to recognize the need to design projects for success is the surest way to land them in trouble. Embarking without an adequate foundation, there is little hope of righting the ship without a major interruption to address the right questions and establish the proper foundation.

Part II of this series on Troubled Projects will deal with the signs of impending project troubles that surface during project execution even with projects that are designed for success.

About the Author
Rob Cimini is a Principal Consultant with Apogee Management Group. Cimini has more than 30 years of experience in diverse manufacturing and research responsibilities. He has a Masters degree in chemical engineering and is a certified project management professional (PMP) through the Project Management Institute. Questions or comments on this article should be directed to email: rcimini@apogeemg.com.

Page last updated: 5 March 2009