Almost every project portfolio has at least one “struggling” project with various performance challenges. A constant source of frustration, it can be tempting to chalk the project up to a lost cause. However, you might be able to shepherd even the most poorly-performing project back on track with a bit of thoughtful analysis.
As a leader, you may feel pressure to skip the analysis and take quick, decisive action based on leading cost and schedule metrics. A quick fix might make a short-term positive impact, it’s unlikely to produce sustained improvements.
We recommend another approach.
Take a closer look at a struggling project, and you may discover a few more nuanced issues that provide opportunities to address the underlying causes of the struggles. Address these underlying challenges, and you will turn your project around and implement lasting changes.
Whether formally or informally, organizations assess project performance using project management metrics (chiefly cost and schedule) and quality metrics. Many companies create some kind of project health scorecard that lists these metrics and assign them a traffic light indicator—red, yellow, green—to indicate how well they’re doing.
Data-based decision-making is a vital part of project management. The concern comes when project health scorecards inspire short-term evasive behavior from project managers (e.g., getting off a “watch list”) rather than doing more thoughtful analysis—especially when dealing with red projects.
The truth is, what appears to be a cost, schedule, or quality defect might actually be an indication of underlying challenges. By spending time identifying these underlying problems, you can implement changes that will be less painful and more effective at getting the project back on track. The big question is, “How do you identify those underlying issues and separate them from the overriding cost and schedule metrics?”
We’ll help you do just that. First, let’s identify some common issues that masquerade as other problems.
Project Management Issues Masquerading as Cost Overruns
When a project runs over budget, it’s tempting to take dramatic cost-cutting measures, like reducing hours or forcing salaried staff to work overtime without compensation. However, before doing this, we encourage you to take a look at the following things:
1) Average hourly rate. Compare it to the rate used in your cost build-up. Sometimes, you wind up with a more senior staffing mix than you originally anticipated.
2) Rework. Compare the original assumptions about rework (cost of quality) with the actual cost. Is there more rework happening because of quality issues or cost changes? Schedule changes might drive rework.
3) Scope. Compared to the baseline scope, have you delivered more than you anticipated? Sometimes, this comes in the shape of unanticipated ad-hoc items. Alternately, this can take the form of a deliverable that has been “gold-plated,” meaning more work was done on it than was necessary.
4) Schedule performance. Compared to the original project timeline, has any work been delivered ahead of the estimated date? Unless you perform an earned-value analysis, being ahead of schedule can make it seem like a project team is over-budget when they’re actually just ahead of schedule.
Project Management Issues Masquerading as Schedule Delays
When a project runs behind, leaders often try to get it back on track by asking people to work overtime to catch up. They sometimes try to “crash” the schedule by having sequential tasks performed in parallel. Both of these solutions can have negative consequences, particularly on cost and quality, so before you take either of these actions, we recommend looking at the following things:
1) Input dependencies. Did a 3rd party or even the client provide inputs (data, hardware, schedules) late? Were any of these late deliveries avoidable? Had they been previously noted in the risk log?
2) Client milestones / internal milestones. Did you miss an important milestone because of the delayed receipt of the necessary information or delayed client decisions? Do you have a process in place for accountability and transparency in the decision-making process?
3) Labor hours. Did the team spend fewer hours working than anticipated, which has caused them to fall behind? In a matrixed organization, where projects compete for staff, this is a relatively common problem.
4) Expert resource unavailability. For projects that rely on specialty labor in the form of subject matter experts, the availability of those SMEs (or lack thereof) can cause schedule delays. Do you have a resource management plan for communicating when the schedule is ahead of time? Is there a process in place for sharing the availability of specialists within your project portfolio or organization? Is there a backup plan for critical positions?
5) Rework. Like cost overruns, discussed above, rework can show up as a schedule delay as well.
Project Management Issues Masquerading as Quality and Scope Problems
Though it is far more common for quality problems to show up as cost and schedule issues, it occasionally happens the other way around. Though rare, it’s essential to cover this possibility for a couple of reasons. First, many organizations struggle to develop key performance indicators (KPIs) for quality management, and when they do, the KPIs often take some kind of narrative form rather than objective numbers. Second, many organizations lack any KPIs at all for scope management, even though scope change is frequently the primary driver of quality problems.
With that in mind, here are two items to look for:
1) Scope volatility. Many contracts include a statement of work that has provisions for some amount of ad-hoc work or changes. Estimating these scope changes during the planning process is challenging in terms of both frequency and complexity, but often, managing these assumptions after project kickoff is just as tricky. Were the assumptions during the planning phase captured? Are they being used to manage stakeholder expectations?
2) High quality and low quality. Some teams focus on delivering results quickly, while others tend to focus on delivering top quality results. It’s a spectrum and depending on where your team falls on that spectrum. You may see either cost and schedule impacts due to low-quality work causing rework or unnecessarily high-quality work causing cost and schedule overruns. Do you have a process in place for managing quality? Ideally, it would be best to have a mix of objective tools (e.g., checklists) and subjective tools (e.g., peer reviews).
Rescue Your Struggling Project and Improve Your Business Metrics
The next time you review a project’s performance, particularly when examining your “struggling” project, take some additional time to look at the metrics. Look at the underlying issues we’ve discussed in this article, and ask some of the key questions we’ve provided. In the end, you might be surprised at the information you can glean from this analysis, as well as the useful long-term improvements you can make to get your project back on track.
Give us a call or send a quick email for a checklist to help you identify the root causes of cost and schedule problems.