By Harold Kerzner, Ph.D.
The Contemporary Issue: Managing Potential Failure
One of the comments I make to senior managers during executive briefing sessions is as follows:
“If all of your projects are completed successfully, you are probably not taking enough risk and not working on enough projects.”
Walking the straight and narrow conservative path and working on projects that have a very high probability of success may result in missing valuable business opportunities that would come from taking some risks.
Most people have a poor understanding of what failure means. Over the past several years, especially before the pandemic, I have read articles that stated that as many as 80% of the projects that some companies executed did not provide even partial business benefits and business value that was desired. These projects were considered as total failures.
Failure to most companies implies we made a mistake when we decided to work on this project. Because most companies seem to have more projects than they can effectively manage at one time because of limited resources, the easiest solution appears to be “trashing” the project and asking the project team to move on to another project in the queue. This was how many companies viewed failure prior to the pandemic.
The mistake that these companies made was not correctly investigating the cause of the failure. Debriefing project teams did not work well because team members were reluctant to share information about a failure for fear that it could affect their performance review. These people preferred to simply move on to another project.
The pandemic brought many contemporary challenges to the surface, one of which was how to manage failing projects. During the pandemic, most companies suffered from a resource shortage and were forced to prioritize the projects with a strong focus on strategic projects necessary for survival. Allowing these projects to fail could seriously impact the business.
Cause of the Contemporary Issue
The pandemic has forced companies to rethink their understanding of failure. Most project teams do not do a good job at explaining failure. The reason, in my opinion, is attributed to the lack of metrics used for monitoring and control of projects. The earned value management system (EVMS) that most project managers use is designed to report performance rather than identify the causes of problems. Time and cost metrics are difficult to use for the identification of the causes of problems.
Failure does not occur at the end of a project. There are always indicators or metrics that, if used as part of monitoring and control right from the start of the project, could provide early indication that a potential risky situation is about to occur. This could allow teams to correct risky situations early in the project’s life cycle. These metrics can serve as an early warning system. Unfortunately, they are not part of traditional EVMS usage. Some of the critical metrics provide answers to the following questions:
- Have the number of assumptions made at the beginning of the project changed?
- If so, what are the new assumptions?
- Have there been any changes in the enterprise environmental factors?
- How many scope changes generated internally or by customers have been approved?
- How many baseline revisions have been made thus far, and which baselines?
- Has the risk designation for certain work packages changed?
- Have there been any issues with project governance or stakeholder relations management?
What most people do not realize is that there are “easy to use” metrics that provide continuous information that could answer these questions and identify potential problems.
Solution to the Contemporary Issue
Given the fact that we now wish to avoid complete failure, a relatively new technique has been formulated because of the pandemic entitled, “Post Failure Success.” More companies are now reluctant to simply walk away from a potential failure and are looking at ways to recover some or all of the expected business value. It requires project teams to see which critical success factors may have changed over the duration of the project. Let’s consider the following as critical success factors:
- Strategic Objective Alignment
- Risk Management Practices
- Processes Used
- Leadership and Governance
As you might have surmised, these critical success factors are aligned with the questions asked previously. If a project appears to be failing or has failed, we ask ourselves:
“What has happened that has caused the failure?”
We look at the critical success factors to see if any of them have changed from our original expectations based upon the answers to the previous questions. Then we ask ourselves:
“What might happen if, based upon the answers to the questions, we change some of our expectations surrounding the critical success factors?”
We are now considering what we should do at this moment. It may be possible to change our expectations and critical success factors such that we can redo the project or continue, and our original expectations can be met, or perhaps revised expectations can be met. The worst case would be to admit that the project’s benefits and value cannot be saved, even partially, and let the project be considered as a failure.
Simply stated, we no longer are willing to admit that a project is a complete failure. We are willing to make changes to salvage as much business value as possible. The concept of “post failure success” is growing in acceptance, but it is still being used near the end of the project. Hopefully, the concept will begin to be implemented earlier in the project life cycle accompanied by the use of new metrics.
Harold Kerzner, Ph.D.
Senior Executive Director, International Institute for Learning, Inc.
Harold Kerzner is an American engineer, management consultant, Emeritus Professor of Systems Management at Baldwin Wallace University, and Sr. Executive Director for Project Management at International Institute for Learning, known world-wide for his work in the field of project management.
Disclaimer: The ideas, views, and opinions expressed in this article are those of the author and do not necessarily reflect the views of International Institute for Learning or any entities they represent.