Tag Archives: revision & expert assessment

This is a question I ask myself regularly as the reasons and the causes I find in my Project Revisions and at the Project Recovery are frequently so trivial that you need to ask: Why at all, and why repeatedly again?!

Probably a reason:

Because they are not managed as professionally as the running business. In many companies projects are executed on the side of daily business though they take up a considerable part of the corporate workload nearly everywhere. They are done “on the fly” by employees who originally have to serve their departments with other tasks. Tasks by which they are primarily measured. Guess where their priorities lie. And they never had a proper education or further training in project management, do not know what to look at when managing uncertainty. Guess how many (expensive) surprises they will face…

An example (not an exemption!)

Recently I did an interview at an exemplary case. There was a company that had chosen a development / implementation partner, got a project manager who dabbled in project management and failed miserably due to insufficient skills. That was already wasting a lot of more money and precious time.

However, they recognized – and nay conceded! – the fact, and now looked for a project manager who could straighten up the mess and stabilize the project.

There are a lot of consultants. And then they came across a provider who should scour the market for a qualified project recovery expert, but in fact filter for the best salary offer (which is easier to sell…), not for the consultant’s competence. Things like that happen every day, over and again. How much punished can you get, up to a total write-off?! Only because money again plays the dominant role, not the result?!!! Do you recognize the scheme? This is unprofessional and would have never happened at a recovery attempt for the company. And yet it would be so easy to avoid…

I suffer with the hundreds of firms where it’s the same! A project recovery, done professionally, does cost so much less than a distressed project continued with insufficient means, and which additionally demotivates or even scares off well educated employees. And on top it will not even earn a minimum of business benefits if cancelled, only a write-off.

Answers

Back to my interview. I received many and long replies, all from executives in C-level of big companies as well as from mid-range ones. All confirmed my perception. They recognized the reasons in internal sensitivities against hiring external staff, long recruiting and procurement processes, the error culture of “not-to admit”, or contractual ties. Mainly because “the system” prevents a professional recovery. Only one CIO (of a problem-shaken, formerly mega public company) wrote, I first should apply in the regular pre-qualification process at the central procurement before I maybe would appear on his radar. It will get difficult to communicate with him on eye level, or even resolve his company’s issues…

My answer is, however, generic. It is directing to “first properly set up the project, and make it ready to be controlled” – with appropriate methodology and (risk)providence. As the customer you always need to be thorough with your supplier selection. That includes for me also procurement to consider the supplier’s project management competence as an important criterion for project success.

If the project, against all good foresight, gets into trouble though, it should however always be in the interest of all parties involved to mitigate a crash or a legal litigation. To keep up concerns for “the system” still would be an entrepreneurial failure. That certainly would be unacceptable, if only due to the sponsors’ pressure, if the case were a company’s distress.

Exceptional situations require exceptional measures.

A Project Revision avoids the failure. The project will only provide the (for all parties) desired business benefit if all act in concert – and in the same direction. Wouldn’t a consensual agreement to a professional audit (see also https://eobz.de/?p=374) be the most targeting resolution – for neutrality done by an external third, who likely even could be paid by both parties? This would probably be the most economical approach for all parties, wouldn’t it?

Whether the operative Project Recovery with the recommendations found in the revision is done back internally or with my guidance – that’s another decision then. But stabilizing the project will always be more favorable than a total write-off, even if hiring an auditor or recovery first will cost additional salary.

Conclusion

To provide proper project management for corporate projects is matter of the boss! And to hire an expert to recover a troubled project is decision of the boss, too…

Two out of three projects run – as far as I see, and which is attested by renowned research since years – into a project recovery. At least they should. As a consequence budget cuts take place, usually with external, supposedly expensive staff – which is ok if they didn’t a fair job – , and new, young, and inexperienced internal people, who only cost a third, shall then lead and execute the newly initiated project to the end. This is supposed to fail, and it will prove to fail! Up to a total Write-off. Only because always money plays the predominant role, not the result?!!! Do you recognize the scheme? This is unprofessional and would have never happened at a recovery attempt for the company. And yet it would be so easy to avoid…

A project recovery, done professionally, does cost so much less than a distressed project continued with insufficient means, which additionally demotivates or even scares off well educated employees. And on top it will not even earn a minimum of business benefits if cancelled, only a write-off.

So why do managers only reluctantly get themselves external help?

Internal directions or restrictions? German error culture? Wo likes to admit that his team is working “insufficiently”… The crux unfortunately often is the fact that management does not think (or isn’t allowed to think) free and entrepreneurially concerning external cost. We have a given personnel, and if that is not working right, we train them, a mentor is put at aid, we escalate, track closer… But nobody has the idea to look externally for a project management professional to support the Project Recovery.

Here are the prejudices to refute:

1. Externals need long ramp up, are not productive fast enough
2. Externals don’t know the internal organization (and need to be doubled with an internal)
3. Externals don’t know the internal processes (and need to be doubled with an internal)
4. We don’t have a guarantee that the External can solve our problems
5. …

They may apply for external consultants because consulting services are designed by nature to dig thoroughly into the topic, and then stay as long as possible with the customer. I experienced that myself earlier in the my time with a big company in the industry. But there are different starting situations and rules with a project revision or even recovery. It’s comparable to a firefight:

1. What’s available least, is time. The external must be able to act extremely fast. Good (freelance) project managers are trimmed to be that, me as project doctor anyway.
2. As a firefighter first thing to do is to send all spectators to the back to have the goings-on open in front of you. No double, no internal organization and structures. They would only be a bar, but they are needed at hand for focused interviews and analysis, short and concentrated.
3. The internal processes and often the structures, too, have led to the fire. After the interviews they are professionally analyzed with skillful eyes, judged, and recommended for changing as necessary, not doubled for continuation. The external is not routine blinded, in contrary has many good and bad comparable experience. And he doesn’t need to care for his internal career when addressing uncomfortable facts neutrally.
4. Well, the only guarantee you have is that you will drown without him (due to missing internal firefighting knowhow). The earlier you call him, the more options you have to succeed.
5. Whether the operative recovery (the fire extinction) with the recommendations found in the revision is done again internally or with my guidance – that’s another decision then. It is important that extinction measures are installed and available fast and at the right attack points.

The External is even “cheaper”

Well, and by the way: Because everything hast o happen that fast, the „expensive“ (external) Project Doctor doesn’t cost money that long, if anything, it is always more favorable than keeping up burning expensively or even risking to leave scorched earth behind. What remains still is the fear to have a mistake interpreted as weakness. What if (as elsewhere) you can earn special credit points for being a big hitter, a problem solver, and a strategic thinker…

Learn more about the topic Project Recovery..

In the first part of my article I have shown how particularly big companies and public authorities merely pre-program bad success, delays, and cost increases in their projects and investments by mistaken staffing of their Project Management positions. This second part is to look at the reasons why these troubled projects do not or insufficiently receive help to get back on track again there.

But how do companies and their responsible managers now deal with their “sub-optimal” project results, how do they react if their projects get into distress then? This is mainly dependent on the corporate leadership culture and structure. And it is the matter to decide on whether, when and how troubled projects get help.

Looking for the wrong causes at mid-size companies

In mid-size, owner-led companies the boss observes a long time; eventually he supports on the professional topics with his know how. On the other side there often lacks a “critical mass” to afford well trained (full time) project managers. The PMs mostly lead multiple projects in parallel, and on top they are intensively involved in other firm activities like pre-sales, technics and design, and administration.

Issues nearly always are suspected on the technical features, nearly never at the (project) management. Therefore the boss mostly waits for the break-through with an unchanged setup, or decides to cancel when sunk cost is getting too high: An immensely expensive self-healing or total write-off. The third alternative to change the setup, thus probably achieving some remaining return of investment in most cases is not on the radar due to a lack of openness for external solutions (“these guys do not know how our business goes”).

But there are also successful exceptions where the boss feels bad for the burned money, and lionhearted requests advice from external experts. If he does early enough there is mostly hope for project success and a gain of lessons for the future.

Phlegmatic corporations and public administrations

In huge firms with multiple hierarchy levels between general and work floor management we find other mechanisms. Project staffing often follows fixed processes, e.g. via procurement as described above. There is enough project management utilization for well-educated full time PMs. It depends on the industry whether they primarily have e.g. project engineers (technical industry) or project managers (service companies).

Whether the company puts invests into PM education and project support by the organization (and thus into quality and profitability of its project results) is a very individual question of project acknowledgement and strategic priorities on the executive level.

If projects get into distress in those companies the reaction is dependent on the corporate culture. In much segmented organizations problems are often kept covered as long as possible while developing a “career neutral” exit strategy. Usually a scape goat is found, and they continue with the same means which led into crisis, until superior levels get alert and stop the project. In such companies the cancellation rate is significantly higher than the number of attempts to recover troubled projects. They produce the majority of project failure and cancellations in the statistics, but not because of unavailable means for recovery, but due to fear of transparence and lack of management attention.

Similar behavior patterns can be found in nearly all projects at public administration. At project setup and solicitation highest emphasis is put on keeping to processes (e.g. VOB, HOAI etc.). Project management often is assigned as part of the trade or craft; there is no control at the principal left due to lacking competence. Why ever? According to a statement of a well-known Berlin politician plan overriding by 30% is “absolutely normal”! A self-fulfilling prophecy that can repeatedly be topped…

Hope dies last

There is hope especially at mid-size or big companies whose „flat“ hierarchies allow management oversight and engagement in project activities, and where there is a basic understanding for the value and requirements of projects for the firm. In some cases I had the pleasure to guide the organization in a strategic alignment to support initiatives and projects more effectively and efficiently. In every of these cases project managers are assigned by sponsors from executive level, and projects are initiated in collaboration with the functional departments.

By higher attention and taking responsibility for their projects (= investments) at the management issues are detected earlier. Then it is only a question of capability to judge the own proficiency for stemming the recovery right, and of the readiness to acquire external expertise in case of skill gaps, capacity peaks or messy situations. Then early reactions are feasible which mostly offer cheaper options to still achieve time-to-market and ROI.

“See, it works!” you could say, if not in the majority of cases the insight to have reached the limits to make it by oneself wasn’t stronger and faster at the affected project leads and teams than at the management level providing funding and orders. Experience unfortunately also shows that recovery rather fails with admitting to have lost control and lose face than with the business case to save more money with it than continuing to burn without. And that is why probably ongoing more promising investments and projects will be prevented unnecessary, but successfully…

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 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 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 !

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…