It is well documented that consistently delivering projects successfully isn’t easy – just take a look at the Project Management Institute’s most recent Pulse of the Profession Report on project management. They found that across all industries, only 64% of projects are delivered successfully, wasting $109million in every $1billion invested in projects or programmes (or 11 cents in every dollar).
Project delivery is facing the challenges of a very fast pace of innovation; teams are often virtual whilst products and services need to be global i.e., they need to work in different currencies, languages and time zones, and customers are becoming more impatient to contend with.
Obviously the scale of investment spend varies hugely depending on industry – a failed construction based mega project with a budget of billions has different economic and political implications in comparison to a small Fintech start-up however the impact of a failed project can be catastrophic regardless of industry.
There are the financial impacts of failure – investment budgets are being stretched ever further so that anyone managing a Profit & Loss (P&L) has to be creative with their budgets as they are invariably asked to do more with less. When a project fails and has to either change direction (and therefore scope and cost are increased) or be re-delivered (spending the same money again and again), it is likely that other projects will also be impacted by being put on hold or canned.
If 64% of projects are successful, that means a whopping 36% (over a third) of projects are failing to deliver, that’s a BIG ripple effect on other projects.
With the focus on regulatory driven projects in Financial Services, the impact of a failed project stretches much further than financial alone. There may also be security and brand impacts as well as personal impacts to team morale.
Mark A. Langley, President and CEO of the Project Management Institute, wrote a great article about the importance of project management to Chief Finance Officer (CFO’s). Three Things CFO’s Should Know About Project Management: “Project management — a structured approach to driving business results through a strategic focus on a company’s most important initiatives — is essential for any organization’s success. It’s also a powerful tool for CFOs, whether they act primarily as stewards of their organizations’ financial portfolio and assets, or additionally as strategic adviser to the CEO.”
He questions how often CFO’s take a look at the waste generated by poor project performance across their enterprises, and whether their level of support for the use of project management best practice would increase if they carried out this analysis.
So if it’s so difficult to deliver projects successfully, how do some organisations do this successfully time and time again? How do they ensure they minimise the risk to investment budgets? How do they minimise the legal implications of failing to meet a regulatory imposed deadline or requirement? And how do they strengthen their ability to consistently delight their customers? This is where project management can shine a light into the darkness that chaos from a badly run project can cause.
Is It Magic?!
When high performing project teams share the following qualities, then project delivery magic can happen!
- Project teams are highly trained, and have the tools and processes to help them to be efficient,
- The strong project leader pulls the team together towards a shared vision,
- Project goals are aligned with strategy,
- Sponsors are actively engaged,
- Project teams understand how they need to operate within their industry.
Organisational culture and approach are the other pieces of the puzzle. The PMI’s research show the five elements all contribute to successful project delivery.
1. Adopt A Project And Programme Management Mind-set
For this to happen, organisations need to adopt a project and programme management mind-set. This means project management has to be valued within the organisation from the top down and from the bottom up. Senior influencers within the organisation need to understand the value of project management and support its use. Project managers who have the right skills and education need to influence their teams to adopt best practice methods. Although this isn’t an overnight process, benefits will be seen very quickly.
2. Use a Portfolio Approach
By using a portfolio approach an organisation can quickly get a feel for its project delivery strengths and weaknesses. All projects and programmes are measured for alignment to strategy, are tracked for progress and monitored for benefits and quality
3. Strengthen Your PMO
Project Management Offices (PMO’s) which are actively aligned and goaled on strategy delivery can strengthen this approach by providing quality assurance, supporting status reporting and standardising approaches, as well as ensuring the project management skill level is appropriate for the organisation through training and development plans.
4. Engage Your Sponsors
Having a supportive sponsor can be the difference between success and failure for a project. An engaged sponsor can remove roadblocks, keep the project relevant and visible at senior levels, ensure necessary resources and funding are available and most importantly, is accountable for the project’s success. The sponsor is the person who cares about the projects success and will help ensure it is successful.
5. Standardise Your Approach
A ‘one size fits all’ approach will not work because organisational culture varies so much – what one organisation finds too flexible, another will find too restrictive. By finding an effective approach that works within your environment and industry and then replicating that approach across your organisation, you can create a repeatable, quality focused standard approach to delivering projects. By implementing lessons learned during and after a project closes, this approach can be refined over time. This helps new project managers get up to speed quickly and established project managers to be productive.
I was lucky enough to work with a Director recently who is fully supportive of the benefits and value of adopting project management best practices. Her large team of project managers were delivering a range of fast paced projects for a demanding client and she needed to ensure she had her finger on the pulse of their delivery status. She needed to be fully aware of issues and risks so that they could be quickly addressed, avoiding the chance of any impacts to the very tight, immovable deadline. My team supported her to develop a portfolio approach, instigating clear lines of governance, accountability and reporting whilst working with the engaged sponsor to explain the benefits of the approach. The real time reporting resulted in reducing risks, cutting costs, and improving the chance of success, FROM THE START, for that portfolio of projects and programs.
Backed Up By Evidence from the Pulse of the Profession Report:
“All change in an organization happens through projects and programs—by many different names. When a project and program management mind-set is embedded into an organization’s DNA, performance improves and competitive advantage accelerates. In fact, according to our 2015 Pulse of the Profession® study, the projects of high-performing organizations successfully meet goals two–and–a–half times more often, and these organizations waste 13 times less money than their low-performing counterparts.”
If Financial Services CFO’s, CEO’s and senior leaders knew the true cost of project failure, wouldn’t they all be clamouring for a reliable, structured and consistent delivery approach to be implemented?
How do these statistics compare with project delivery success and failure in your organisation? What approaches do you use to de-risk project delivery?
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