Too frequently, projects are begun and completed with no regard to strategy, and vice versa, incorrect strategy can often generate projects that are not beneficial to the organization or the Customer.
What comes first – the project outcome, or the Organizational/Customer strategy that the project is supposed to support? Either way, the chances of project failure are greatly increased if there is little harmony between the two, and even if the project starts out in harmony, strategy or other environmental factors (including political motivation and ego) can soon lead to deviation from the organization aim. Add to this mix the rapid emergence of Program and Portfolio Management – which are much more closely aligned to strategy than Project Management per se.
In an organization whose success depends largely on successful execution of Projects, it is a fact that the careful selection of Projects is required to achieve its goals and objectives. Projects that deviate from the company’s vision and strategy should not be pursued. It is one of the first rules of good portfolio management – and good business.
Yet the ugly truth is that misfit projects that neither aligns with the goals of the business nor tap into the core competencies of the team are pursued. In addition, the project manager becomes the “Scapegoat” who everyone would then blame to for the failure of such projects.
Such projects have very low probability of success and minimal/no rewards. Customer and the Project team gets frustrated at the ever-revised deadlines and this leads to Fatigue. It is a lose-lose situation. Even if the project is delivered successfully – on time, on budget, good quality and all requirements met, it is still considered failure because it ultimately don’t contribute value to the business.
From implementing unwanted systems to developing new products that don’t fit with the Organization’s business strategy, the projects can burn piles of money and waste precious time if they are not terminated or reconfigured/recalibrated. Though they might make sense for a specific team or business division, they might not be right for the organization as a whole.
Business Impact:Projects that deviate from Company’s vision and Strategy might create a huge impact on the business, thereby de-stabilizing the growth and slowing down the overall progress to meet the Business Strategy.
In Organization context, following functions might be impacted by such Projects.
Revenue targets, Profit Margins
Trying to answer why this happens so often was the goal of a recent Geneca Study. The study examined why IT teams struggle to meet business expectations for their projects, and asked participants questions on topics such as requirements, accountability and measuring project success. A high number of respondents either showed a lack of confidence in their projects’ success, with 75% of respondents saying that their projects are always or usually “doomed right from the start.”
Geneca cited several problems causing the lack of confidence in the projects’ overall success. Key study findings include:
- 80% of respondents said they spend at least half their time on rework.
- 78% said the business is usually or always out of sync with project requirements and business stakeholders need to be more involved and engaged in the requirements process.
- 55% said that the business objectives of their projects are clear to them.
- 23% stated that they are always in agreement when a project is truly done.
It is obvious from above and in best interest of organization to identify appropriate investigative measures to evaluate such project proposals and review its business case prior to approval.
As part of this process, portfolio managers and project governing bodies must be authorized to make tough decisions and to hold stakeholders accountable for the projects they promote. They are the ones who have central oversight linking project goals with the Strategic business objectives.
Once a project is kicked-off, regular reviews must be conducted to evaluate its progress in lines with the organizations objectives. If the Project and Business goals are still aligned, the project can continue. If not, the portfolio managers must be empowered to terminate the project(s).
“It’s a hard choice to get rid of a project that is underway, but a project has to fit with the strategies of the company or it will not add value” – Didier Rancher, Global Synergy Group, Paris, France.
In dynamic businesses, changes happen all the time and this has a high impact on the programs and projects. Projects are initiated based on the market needs and those that make business sense to an organization. This is based on the information available at the time when projects are initiated. Later, six months down the line, the business environment can change and hence the technology gets outdated and the program/project associated with that becomes no longer valid.
Example: With the evolution of Smart Mobile Phones, Android was the preferred Mobile OS and it led to the wipe-out of Symbian OS based phones from the Market. This eventually led to downfall of Nokia’s share from the Mobile phone market and hence all the ongoing associated projects have had a huge impact.
Executive committee gets involved in discussing various options for high profile projects than they were a few years ago. Questions are being asked more openly and things are constantly reassessed to check the health of the program/project. There are so many parameters that it becomes essential to validate/reevaluate ongoing projects and decide whether these are still value add and benefits are really there.
The irony is that even though the project managers are rarely part of the decision-making process and involved with the stakeholders who approve such projects, they are held responsible for identifying risks and sharing concerns with the PMO or governing body.
Ideally, the project manager should track and alert the top management on regular intervals if project deviates from the original objectives defined in Contract/SOW. Moreover, it does not end here. One has to also keep an eye on the external forces influencing the project.
Example: Any change in market dynamics that has potential impact on the value proposition the organization/customer expects via project outcome. It could be a new product developed on emerging technology OR a set of services offered in the existing domain or technology.
The project manager must identify and assess such Risks for the project adaptability in accordance with the market dynamics.
With the ever-changing market dynamics, Organizations need to constantly revisit their Business strategies so that they could adjust as per the market realities and also possibly look for venturing into the newer domains.
A classic example: With the evolution of latest trends and technologies in the space of multimedia and entertainment, may IT Services organizations had an opportunity to generate new Business out of existing Customers by tapping into their other product segments. This led to the business growth in the newer segments and this generated a huge potential to grow in future.
Remember: Good management forecast allows us to avoid non-profitable projects and proactively terminate projects that no longer make any business sense.
Project managers have to walk on a thin line when sharing their concerns about the project’s value with Key stakeholders. This helps determine the future of the project and its validity with respect to the latest market trends.
More stress must be given to the Quality and Organization metrics used to check the health of the project. Project managers must openly discuss their concerns with the Stakeholders and ask questions like
- Is Scope intact? Will the goals be achieved according to the timelines specified in the plan? If not, then why?
- Do we have adequate resources (money, equipment, facilities, and training) to achieve the goals? Are estimates still valid?
- Are the goals and objectives still realistic?
- Should the priorities be changed to put more focus on achieving the goals?
- Are we in line with the original Schedule? Any Risks here.
- Were the assumptions we made still valid?
- Are the dependencies sorted out?
- Are the set of identified Risks enough to continue executing the project? Does it make sense to deep dive to uncover potentially more Risks?
- Is Customer happy with the progress of the project? Any concerns in this area?
Any change management enforced by internal or external stakeholders would have a potential impact on the Scope, Schedule, Budget and Quality and hence estimates of the project. If we have answers to these questions, we are good with respect to the project delivery, else we may have to rethink the overall strategy and make possible changes, if feasible at this stage.
Project managers can minimize the disconnect between project goal and business strategy with facts and no opinions or emotions. The fact is that the thought itself will initiate the Project Sponsor to rethink on the decision to move forward. Yet even, this is not the case always.
In such scenario, it would be best to synchronize the project with Organization business strategy. If one can link it to strategic vision or organization, a value-add can be derived.
If key project stakeholders continue questioning the purpose of the project being executed, the Project manager should concentrate on delivering to the expected goals. It might be tough, but would be best option in such scenario. However, it must be made clear to the sponsor as why the project does not align with the organization strategy any longer. If this is not discussed/brought out, there would be heavy losses.
Making the most of the troubled project is sometimes the best one can do. The best recommendation is to finish the project in the correct way and then start looking for more challenging opportunities. Also, adapt to market requirements and change the way Projects are executed in current Scenario. Moving from Traditional approach to adopting Agile may be the way ahead.Author is Senior Manager for Business Excellence with Sasken Technologies Limited, Bangalore