Project-DVR

Why Bad Projects Are So Hard to Kill

Why is it hard to recognize impending failure?

The very nature of projects, something that has never been done before, means there is always a risk of failure. While some projects fail in pieces, cost over runs or late delivery, others fail in totality.

Because projects are often times close to the brink of failure yet they ultimately succeed, sometimes it is difficult to predict abject failure. There are many examples of projects that looked over the precipice a few steps away from total disaster, ultimately achieving great success. Another reason why it is sometimes hard to recognize a project’s impending failure is many organizations do not have processes in place to foresee it. These organizations lack proper controls, and do not collect relevant information. A change in the structure would go a long way to prevent project failures. Similarly, poor risk management is another cause for project failures that go undetected.

Yet another cause of project failures that go unrecognized is “collective belief” noted by Royer. Typically the collective belief begins with the project’s evangelist and continues to grow like a snow ball rolling down a hill. The project’s  evangelist with an extensive and strong network, charisma, and a good reputation can fan the flames of collective belief in the project very quickly. Other factors like personal and organizational desire for a “winner” is further strong incentive for people to believe in the project. At this stage, a “group think” emerges that causes everyone to move in lockstep, critical thinking goes out the window and outliers with differing  opinions are censured.

Avoidance techniques to limit impact of bad projects

The longer bad projects run, the greater their impact on the organization. Therefore, an early warning sign to indicate a project is a bad one is essential. Ideally, the warning should come very early in the project’s life cycle - the sooner the better.

During the initiation phase or at the point of scope development, rigorous examination of the project’s viability including risk profile must take place: Is the project the best way for the organization to achieve its strategic goals? Are there other projects that can accomplish the organization’s strategic goals for less money, shorter duration and less risk? How does the project’s financial metrics like payback, ROI, IRR, or MIRR compare to the organization’s benchmarks? In addition, a SWOT analysis vis a vis the project, the firm, and market should also be done. If the project passes these types of gates and is executed, key factors like earned value, risk, quality and the project’s standing in the organization’s project portfolio must be continually managed.

Significant changes that are detrimental to the project means the project should be seriously considered for termination. At the completion of rigorous assessment, if necessary the project should be shut down - immediately. This type of objective, rigorous, methodic process will limit a bad project’s negative impact on the organization and its customers.

By: DVR