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December 2003
Executive Session:
Recognizing Project Warning Signs
By J. LeRoy Ward, PMP
The Executive Session is written by executives specifically
for executives and the managers who report directly to them.
This month’s column is the first in a two-part series on the classic warning signs of troubled projects.
Part 1 discusses how to recognize early warning signs. Part 2, to be published in the February 2004 issue,
offers steps to conducting a project health check and what to do with the results. We see warning signs every day, such as “Wet paint” or “Road Ends in Water.” Such signs are common reminders to be careful. The earlier we heed their advice, the better off we’ll be because time is a resource when it comes to dealing with warning signs.
For example, when asked to identify the telltale signs of heart trouble, most people will list numbness in the left arm or pains in the chest. Although these are some classic symptoms of heart trouble, once they occur it is often too late.
People need to look at early warning signs, such as high blood pressure or higher cholesterol levels. These early warning signs provide us with the gift of time to change our behavior to affect our future.
Recognizing Early Project Warning Signs
The first sign of scope problems really occurs when:
Warning signs are about the future. The sooner we know about the future, the more time we have to change it. However, project managers and organizations can’t see into the future. The best way to “predict” the future of a project is to estimate what problems the current project might encounter based on past, similar projects. It’s not foolproof, but it’s certainly better than adding a fortune teller to your project team.
Project Health Checks — Five Categories of Warning Signs
Most people have more than enough information on project warning signs to create a long list.
However, it’s not the quantity of the items on the list, it’s the quality of the list that makes
the difference. The best list of warning signs is one developed especially for your unique project, organization and customer.
Following is a list of five broad categories of warning signs to help you get started on creating your own list.
These five categories have proved to be common for organizations that are successful in using health checks to ferret out problems.
Project Control
Unfortunately, knowing what money has been spent is really not a good warning sign because it’s historical information. What we really need to know is what costs the project will incur next month or next year — the project’s burn rate. If we know the burn rate we can estimate what our costs will be and we can mitigate loss or increase our ROI by making resource decisions now to create, or at least shape, our future.
Compliance
If you’re a two-person shop doing Web development and living in a cool loft in SoHo, you don’t need a methodology. If, on the other hand, you are Rene Speitel, Vice President of the Worldwide Engagement PMO for HP Services, with thousands of projects underway at any one time, you know that a methodology is extremely important because a methodology:
Designing, developing and implementing a project management methodology requires a significant investment of time and resources. The organization has a right to receive a return on that investment. You need to ask questions concerning the use of the methodology as part of health checks to ensure that your project managers are using the best practices your organization has learned over the years. In fact, by doing so, your organization is ensuring that your clients are getting the best level of project management available.
Validating the Business Case
You and your organization are probably no longer approving projects unless you have concrete proof of a substantial return on investment. In addition, the scrutiny does not, or should not, stop at that point. Many organizations are monitoring business case objectives throughout the project life cycle.
This laser-like focus on project benefits means that the business case is being validated during project execution. The best corporations are looking at benefits management during project execution and killing those projects that won’t make their investment objectives. But killing projects is hard, and in some organizations downright impossible, as was the case with RCA’s SelectaVision, a videodisc player.
In 1970, RCA announced the development of the SelectaVision player even though experts in the field questioned the use of videodisc technology. Seven years later, the company launched the first prototype, long after all of its competitors had abandoned the videodisc research, citing the quality and increasing popularity of VCRs.
Despite all of this expert opinion, in 1980 RCA introduced the SelectaVision. Although the product received tepid consumer response, RCA did not abandon the project until 1984. Only after spending 14 years and $140 million, did RCA finally declare the product a failure.
Everyone at RCA pressed forward because of a collective belief system. The engineers were so convinced that they had a successful product they were incapable of considering the idea that the product was going to be a commercial failure. (Royer)
Had the SelectaVision project been subject to regular and rigorous health checks that included case validation conducted by independent experts, RCA might have been spared the staggering losses it incurred.
Risk Issues
The “Human” Factor
Project health checks look at how the team is functioning, if the sponsor remains committed, if the client is satisfied with the team’s work and any other human factor that could adversely impact the project. Therefore, the successful project manager will always keep his or her finger on the pulse of project relationships to ensure that the team is headed in the right direction and that the appropriate stakeholders are well informed.
Project managers need to remain constantly alert for any possible disruption of these relationships. This diligence can be difficult for project managers, who are often task-oriented, not relationship-oriented. Relationships of any kind, whether they are personal or professional, need constant nurturing and the good project manager knows that and will devote a significant amount of time to it.
Using Warning Signs to Rescue a Troubled Project
This article is based on Mr. Ward's popular Webinar "Trouble Ahead? Know Your Project Warning Signs! How Successful Leaders Recognize and Deal with Project Warning Signs." The seminar contains additional insights into recognizing and dealing with project
warning signs and can be viewed by visiting our Webinar archive page. J. LeRoy Ward, PMP, ESI’s Executive Vice President, is responsible for all
ESI corporate client engagements worldwide. He has authored several publications and articles,
including Project Management: A Working Glossary, PMP® Challenge and the PMP® Exam Practice Test and Study Guide. E-mail Ward at lward@esi-intl.com.
References:
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Many people believe that the first sign of trouble with a project is scope change. Usually by the time the scope has changed, the project has already slid down the slippery slope of scope creep.
My favorite name for the activity of finding out if a project is on track is the project health check. This increasingly popular and proven approach includes three main activities:
Most organizations look at the schedule, cost, quality and resource usage of their projects. These issues are indeed important but are only the tip of the project iceberg. When you, as a project sponsor or executive, ask how much money has been spent, you’re asking about the past.
Project managers worldwide are an independent group of people. They like to give orders, not take them. Consequently, they don’t like being told what to do or how to do it. That’s why many organizations struggle when introducing a project management methodology. Yet, we know that certain practices will have a beneficial effect on our project, and we also know that we need a consistent approach to practicing project management across an organization. Otherwise, everyone will be going off in his or her own direction and doing what he or she thinks is best.
Projects are done for many reasons, including increasing customer satisfaction, enhancing efficiencies or developing a new product.
To many organizations, project management is risk management so, their health checks always include a section on project risk. These organizations scrutinize the risk management plan, identify top ten risks and issue risk management practices.
Project management is a team sport. In the classic description of project management, the project manager perceives himself much like Ptolemy perceived the earth — like the center of the project universe. Accordingly, the project manager needs to be concerned about the relationships among the various project stakeholders. Without solid working relationships among these players, the project’s chance of success is threatened.
Once executives and managers have identified what signs of trouble to look for,
the next step is to conduct the health check and to start turning the project around.
The next Executive Session, to be published in the February 2004 ESI Horizons,
will offer some ideas for conducting the health check and will include advice on what to do with the results.
Royer, Isabelle. “Why Bad Projects are so Hard to Kill.” February 2003. Harvard Business Review. 81(2): 48-56.
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