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In my article this year in May (Why projects in distress are rather written off than recovered) I described my impressions and considerations about restraints to refer to neutral and competent help in distressed situations. Failure culture is actually one of the main causes for distressed Projects and especially for ongoing or repeated project crisis, and therefore subject of my article here.

Different treatment of crisis situation at companies vs. projects

When companies are in trouble it is obviously a matter of course to bring a crisis-proven consultant (“Turn-around Manager”) on board to apply leverage with his independent insights without mind cuffs and get the company going again. However at troubled investments and distressed projects, even if they are immensely expensive or strategically important, the accountable managers unequally do harder to confess the fact that they are tied up in dangerous waters which they are not able to get out by own means and their project management without significant losses. To all instants and purposes this seems not understandable, as a failed or cancelled project leaves no value to anybody; it’s just an expensive write off, isn’t it? Why then, with the same matter of course, don’t they instead ask an experienced external professional how to yet safeguard at least some benefits and ROI at the troubled project?!

After the broadcast of my article in October I received a lot of feedback and intensely discussed with many colleagues and clients. I now would like to summarize the results here, and to keep the discussion stimulated widely spread. Ideally I’d like to consolidate feedbacks here to provide the information to all participants and interested people. Therefore I’m happy if you adopt my stimuli from the various media and then use the comment functionality here for an intensive, multi-level discussion.

So, what findings about the treatment of projects in distress did I manage to collect?

1. The reasons for serious problems at projects as a matter of fact are usually of a quite simple nature. What seems to be trivial for my as an expert, is obviously a widespread mystery in practice: Always and everywhere it’s the same, well known, basic mistakes that happen. In certain melanges they then lead to the calamitous vortex that threatens the project to be absorbed. And those who steered it into this situation probably won’t find the way out – if they had seen the peril they obviously wouldn’t have gone there at all !
2. There are cultural differences dealing with the crisis situation. American/English owned companies tend to react much more willingly and faster to analyze, pinpoint and eliminate the causes than German companies do. In Germany the loss of face seems to outweigh the economic success – very irrational and expensive !
3. For the same reason the former also ask for competent, external help much more early. If you don’t have the competence for resolution in-house you simply buy it. That’s more efficient and effective, and as we know just in crisis situations time is money !
4. Corporations behave different compared to medium-sized companies. In big organizations project management processes are increasingly mature and well documented, consequent application however depends on the project manager’s individual qualification and the management’s priorities. When problems appear often responsibles‘ first look is on their own careers. Issues are dismissed, whitewashed or not reported more often. In case of doubt they look for a scape goat, if possible not at the own department. Management frequently is not involved enough, learns late about the problems and decides to consequently take countermeasures even later. Because of the companies‘ usually strong financial backgrounds projects are more likely to be cancelled and written off; some do simply fade away if not driven „top-down“.
5. In medium-sized companies management mostly decides faster and more consequently – well, it matters to their own money. Having not enough corporate PM capacitiy the project leads have (too) many projects to look after in parallel and are deeply involved in functional work on top. Project Management as a discipline is rarely mature and well-marked. Moreover established corporate culture and a market position free of sorrows for decades have often built a very functional, product oriented way of thinking, in which the management often has not yet properly anticipated their operational roles in their projects. External advisors are said to be too expensive, to have no clue of the company’s individual business, and to be be a potential leak for corporate internal affairs. Here it’s more the jeopardized halo of the patriarchy that leads to long lasting hope for self-healing and prevents efficient and effective solutions.
6. At public authorities in many countries problems mostly are pre-programmed „in the system“. Processes and instructions for solicitation and seller selection, like German VOB, are pre-defined in nuclear detail; after that projects are expected to strictly follow the contracts. Project management often does not exist at all or is limited to coordination without authority; mostly it is also contracted to the supplier. The faith in regulations washes clean from all insufficiencies outside the rules and blocks self-reliant initiatives for improvement. It really takes a very prominent “bad case”, highly political and too big to die, and a very prominent external savior from the political environment to make a significant setting the course happen. Let’s not examine his own competence to recover distressed projects…
7. Projects at corporations and public authorities also often suffer from insufficient staffing of the project management positions. To simplify and rationalize the supply chain they prefer to depend on “preferred sellers” or even contract only with the big (and expensive) consultancy firms – without distinction of the hired resources’ effective quality. Procurement’s price lists and provider’s frame contracts rarely leave enough range for adequate project management staffing. Many responsible department leaders therefore need to put up with what they get for small money – even in distress situations !

Distressed Projects recovery is (almost) always beneficial

But nearly all troubled projects and investments have one thing in common: With a small effort and a little bit of impartial support they could be led to a reasonably successful result – much cheaper than if continued as is ! Bringing project partners stuck in positions back to objectives, and achieving agreement on cooperation with concrete, expedient measures would already be „half of the rent“. Within the project there is mostly the willingness to proceed so, the openness has to take place in the accountable management’s heads.

Now it’s your turn. What, in your experience, are the biggest road blocks why projects are still rather written off than recovered? Write your comment, provide your input about the causes for distressed projects to a discussion of which we all can learn and profit !

Learn more about the topic of Project Recovery…