Projects of all sizes face challenges, but how do you know whether a project is nearing a tipping point into possible failure or whether it can be rescued? The decision to stop or to rescue a project, especially when a sizable investment has already been made, requires a clear picture of the real state of the project, its products and the team as well as the courage to make the right decision based on those facts.
I recently sat down, virtually that is, to chat with Samme Doshen, a Partner at Avenai and a seasoned executive who has over two decades of experience leading large-scale enterprise initiatives for public sector clients. We talked about some of the key factors to consider when dealing with a project rescue situation.
I asked her three questions that we often hear from project sponsors. Here’s what she had to say:
1. What’s the first thing I should do if I think my project might be in trouble?
Stop and take stock of your project in a quantifiable way.
Start with “where are we – really?” Often with a troubled project, milestones slip or are missed incrementally over time due to different factors – scope, leadership, environment, technology – and there’s not a clear understanding of how much progress really has been made or how much further there really is to go. A scenario might sound like this: “We were going to deliver the project in January but then X happened, and we re-planned to deliver in April, but then Y happened, and now it’s going to be September… of next year” to the point where there is diminishing belief in the plan, increasing doubt in the value to be gained from the project, quite a bit of tension between business and delivery, and likely a pretty demoralized team.
Avenai is often asked to come to perform a project “health check” at this point: when leadership is unsure about where the project really is and whether it will be delivered on time or at all. One of our first steps is to examine the project from a “product” perspective: to examine how many products are to be produced by the project versus how many are done and how much effort (money, resources, time) it took to get to that state. In other words, you need to measure or “take real stock” of where the project is in a quantifiable way.
Two key elements in taking stock are: what are the products to be produced, and what does “done” really mean? Difficulties in defining either of these two elements are often at the root of project issues. We have seen many projects where lack of agreement on requirements or products, or definitions of completion has been glossed over in the drive to move forward. That’s a mistake: we both need to agree on what we’re building and we both need to agree when it’s built. And if for some reason we didn’t do that at the beginning, we absolutely need to do that in a re-plan, health check or project rescue situation to be able to evaluate where we are and whether it is worth going forward or not.
2. How should I decide whether the project is worth recovering (vs. shutting down)?
It’s the same decision as should be made at the beginning of the project – and at any point of material change. Will the business value to be gained be worth more than the cost (money, resources, time) to get there?
The difference in a re-planning situation is that you need to set aside the sunk costs for a moment. That money and those resources are gone – you might recover some value, but you won’t recover the costs. And the sunk costs should not be a reason to continue: “We spent $20 million on this project so far, we simply can’t shut it down” is not a reason to continue. You do need to know what those costs are to estimate what your costs will be going forward, but they cannot be the reason you move forward.
The decision to move forward is a business decision. Like we talked about above, you need know where the project is – how many products there are and how many are done. Then you need to look at the resources (money, people, time, technology) it took to get there to estimate what it will take to get to all products done – adjusting for project experience to date. Is that cost/benefit still viable?
Beyond the project cost/benefit, you need to look at other options. As painful as it might sound, it’s a refresh of your business case. Are there business changes that make this project less valuable or other projects a better investment? Has technology changed? And don’t ignore maintenance costs. For example, “In the four years it has taken the project to get to where it’s not at [sic], a new software service has come out that will do 80 percent of what we were building in-house at a lower annual maintenance cost. What is the best business decision now?” Four years is a long time, it is unlikely that the exact same conditions exist as when the original investment decision was made; the decision to move forward or to stop must be made based on the conditions today.
Finally, in considering a “stop” decision, the project products should be reviewed to determine which project products might be salvageable. In other words, they might form a minimum viable product (MVP) that could provide some business value as-is or with limited focused investment. While this is more likely on an agile project, even waterfall projects in early stages often have artefacts that can form starting points for other projects.
3. What other factors need to be considered to successfully rescue a project?
You do need to look back. How did we get here? What do we need to fix to be certain of success?
We’ve talked about the “hard” elements of a project: milestones, costs, value, etc. Let’s assume we have figured out where we are in the project, how much it will take us to get to done, and that we are confident that the project is worth rescuing – value exceeds costs and there are no better alternative investments. Great! We’re ready to keep going. Except we aren’t; we can’t ignore that we got to this point, and we need to look at what “helped” us get into trouble and address those issues before we can confidently move forward.
At Avenai, we have developed a framework we describe as the “winning conditions” for a successful transformation or major project. We have talked about some of the key elements: clear outcomes and business case. It is important to examine some others to ensure success moving forward:
- Do we have committed business leadership – both in the business/project sponsor and delivery authority?
- Do we have effective governance? Is it clear who is accountable and who is responsible? Are decisions made efficiently and effectively?
- Does our project manager have the right skills and experience to drive this forward? Is our project management approach fit for purpose? Too light? Too heavy?
- Does the team have the right people, with the right skills? Do we have sufficient capacity and the right tools? Are our supplier partnerships effective?
These are all critical questions that should be assessed as part of the decision process, and answers incorporated into the plans and estimates fed into the investment decision to move forward.
Finally, even though a project may conclude “on paper” that it has the leadership, governance, management and team required to move forward, it is often the case that when a project gets to the point of project rescue, the team has been working long hours at a hectic pace. Team members may be exhausted and/or demoralized. Beyond looking at a team’s capacity and capabilities, their morale should also be considered: does the team have the motivation needed to reset and continue? What steps can we take to address the situation – including capacity and capabilities, but also looking at effective measurement, reward, culture, and organization elements.
If a decision is made to rescue the project, you will need a leader who is committed to continue, has a clear vision of how to move forward based on the business case, and has clear support from the organization to go forward. Equally important, is having a team which is bought in and has the right capabilities and enough capacity moving forward.
Fundamentally, there are several winning conditions that need to be place for a project to succeed from the start. They need to be maintained throughout a project and they certainly need to be in place for a project rescue situation to be successful.
For more information on the winning conditions, we invite you to download our Winning Conditions.