How to Avoid Project Failure?

Transcription

1 How to Avoid Project Failure? Richard Schofield FRICS, MAPM MD, Rider Hunt Management Services Chairman, RICS Project Management Faculty 20 March

2 How to Avoid Project Failure? Outline: Causes of Project Failure Why we don t learn! Case studies Front end problems Brief Reality Check Communications - Crucial Conversations Project Evaluations - Learning from History - A vital tool to prevent Project Failure 2

3 Project Failure Most projects that fail are in trouble before they start The root cause of the problem is over optimism and biting off too much in one go The seeds of project failure are overwhelmingly linked to factors at the front end of the project 3

4 Common Causes of project failure Poor project definition Unclear objectives Unrealistic targets Inadequate risk evaluation Client inexperience Poor forecasting of demand Lack of effective sponsor and strong leadership Poor communication / lack of openness Inadequate stakeholder management Focus at the wrong end of the project Source : Major Projects Association 4

5 Why don t we learn from project failures? Not making good use of project tools available Political pressures / interference lead to unrealistic expectations Don t listen to those on the front line Don t ask the right questions at the right time Easy to blame others Habit 5

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7 Concorde /170M 275M 450M 730M 970M 1,065 7

8 Concorde binding agreement with an imprecise knowledge of probable cost project studies not done deliberate submission of overly optimistic estimates politicians obsessed with prestige no market research (747) Treasury starved of information 8

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10 Sydney Opera House $7.2M $9.76M $17.94M $25.0M $34.8M $49.4M $85.0M $93.0M $99.5M $102.0M 10

11 Sydney Opera House the government of the day was committed to a prestige project for political reasons if the facts had been known to begin with the Opera House would have never been built complete lack of knowledge of user requirements clients and public were completely mislead by the first so called estimate 11

12 Sydney Opera House This estimate of three and a half million pounds prepared I believe by some unfortunate Quantity Surveyor under duress in a few hours was of course hopelessly out. Ove Arup 12

13 Once upon a time the Scottish Parliament wanted a new building.. 13

14 Once upon a time the Scottish Parliament wanted a new building.. Auditor General s report June 2004 Slippage: Detailed design variations Late supply of information Unrealistic target dates Cost Increases: Design development added 80M! Concentration in details - costing design rather than designing to cost Restricted tender competition 14

15 Once upon a time the Scottish Parliament wanted a new building.. Project Management and Control : Quality objective achieved - time and cost were not Unclear balance at start Leadership and control not clearly established Responsibility and accountability not allocated Cost plan not fully agreed Needed better cost reporting and financial control 15

16 Once upon a time the Scottish Parliament wanted a new building.. Risk Management: Accounting for risk inadequate No quantified allowance for major risks Little evidence of forceful action to prevent or reduce cost increases Professional Fees: Costs not controlled Procurement strategy: Insufficient experience of Constr. Management 16

17 Coquihalla Highway 17

18 Coquihalla Highway Initial Estimate - $750M Final Cost - $998M 18

19 Coquihalla Highway Issues: Legislature mislead by documents presented to it True costs not represented in a forthright way - manipulated Fast track schedule - design not adequate - work not adequately specified No accurate and timely cost reporting Inaccurate estimates No effort to monitor or report costs Lack of control over major changes in scope 19

20 Coquihalla Highway Recommendations:* Realistic assessments of costs and uncertainty of major capital schemes Initial approval for schemes limited until project details developed Approval process requires full details of scope, costs, schedule - evidence of proper planning Adoption of PM practices - Single PM / Full time support / documented delegation / project control group Review of contract document - ensure fair risk sharing Review of estimating procedures Comprehensive cost reporting management system *Evidence called from PMI 20

21 How do we define success or failure? 21

22 Typical front end problems Not enough time or resources applied to determining the business needs Political pressure and interference Reluctance to seek advice or accept advice Poor client leadership / delegation of responsibility Failure to determine the real drivers for the project Wrong people in the wrong positions Poor judgement Blind optimism Untested, unreliable, misleading or wrong information Lack of clarity of objectives Lack of a Clear Brief! 22

23 Why is a good Brief so important? Clear framework for the development Client s objectives and main priorities Meeting needs of Business Plan Articulation of needs and aspirations Communication of expectations Provide a common language Means of determining the success of the project 23

24 The Reality Check! May stop a project before it starts! Or a disaster before it hits! Cost / Time / Quality triangle Use well respected experts Leading edge, world class, award winning - What do they mean? The customer is always right? Can the client perform?... 24

25 Reality Check Barriers The client knows best! Reluctance to present or accept bad news! Political influence / interference You are the expert you know what I want just tell me when its finished We haven t time for all this - we need to get moving! We haven't the budget for these extra fees We didn t need to do it on the last project and there were no problems! 25

26 The Project Manager and the Brief Early appointment Key position to give advice Raise awareness of importance of Getting the Brief Right and the consequences.. Bring in other experts / sources of knowledge Skills audit and resource assessment Review / implement Lessons learned Risk Assessment and planning Honest broker Influence decisions at the right level Art of persuasion or blunt opinion.. 26

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28 What lessons have we learned? Keep politicians away from major (or any!) projects or manage them better! Make project stakeholders aware of consequences of inadequate pre-planning Challenge / question / test all assumptions Secure the appropriate resources Build in time to plan and review Get the Brief Right and test it before its too late! - But what do you if you think things are not right?...soft Skills needed!... 28

29 Intelligent Disobedience* Question authority Step in when there are serious doubts Say no! Creative Disobedience Takes courage and skill to confront client And To SPEAK UP! *Gobal Kapur 29

30 Crucial Conversations 30

31 Crucial Conversations Breaking the code of silence on five astoundingly common yet largely undiscussed and ignored problems will contribute significantly to project success. 31

32 Crucial Conversations - Key Findings Project Leaders: 91% experience one or more on 40% of projects 91% report problems difficult or impossible to resolve in their organisation 61% attempt to speak up - 14% effectively 88% report issues continue through project 82-87% negative impact budget / scope/ schedule 73% of projects suffer team morale problems 32

33 Crucial Conversations - Five Key Areas 1. Fact Free Planning - Failure to Get Real 2. No leadership from Sponsors - Absent Sponsors 3. Skirting - Working around the formal process - Power Play 4. Don t admit when there are problems Denial - Project Chicken 5. Unwilling or unable to support project Team Failures 33

34 Crucial Conversations - Key Findings 1. Failure to Get Real - 80% Experienced - 18% discussed 2. Absent Sponsors - 77% Experienced - 14% addressed 3. Power Play - 61% Experienced - 15% Said something 4. Denial Issues - 82% Experienced - 18% reacted 5. Team Failures - 62% Experienced - 19% talked about it 34

35 Crucial Conversations - Implications When one or more of these problems is not confronted or not confronted well - it festers, sets off workarounds, and produces politics Unless and until leaders take measures to ensure the environment is conducive to holding crucial conversations a significant number of these issues will remain unaddressed, invisible and fatal 35

36 Crucial Conversations - Implications 36

37 Crucial Conversations - Implications 37

38 Crucial Conversations - Solutions Crucial Conversations Right people having the right discussions at the right time! Cut the vicious cycle of silence Change organizational culture Environment for open communication Reward / recognition for speaking up Encourage candid dialogue Leaders must engage in crucial conversations 38

39 Crucial Conversations Also.Crucial Confrontations! Air clearing Position setting Cards on table time Get off the chest.. More information & newsletter go to 39

40 Post Project Evaluation One of the most important (and perhaps underused) tools for the Project Manager. Prevent project Failure by learning from the past! 40

41 Post Project Evaluation You ve finished at last! (a) That was great - let s do it all again! (b) Yawn! - next project please (c) What a disaster - never again with that team/ client - it was all his / her / their fault! Lets get on with the next job - This one will go much better! You hope. 41

42 Post Project Evaluation Why Evaluate Optimise the value of the collective experience of the Team - otherwise lost Opportunity to re-cycle this experience to benefit future projects Part of continuous improvement Huge opportunity to Learn / Change / Improve 42

43 Post Project Evaluation How? External audit Internal Audit Project Team Workshop 43

44 Post Project Evaluation Objectives Measure success of project against the original objectives Identify problems and causes Identify lessons learned Improve project performance 44

45 Post Project Evaluation Workshop Process Involve all stakeholders Neutral venue Carry out pre-workshop survey Framework for the Agenda Rules / conduct Time for discussion Capture good and bad experiences Elicit solutions not just complaints! 45

46 Post Project Evaluation Input Experiences Observations Constructive criticisms Honest assessments Ideas for improvements 46

47 Post Project Evaluation Output Strengths and weaknesses of Project Delivery process New or revised procedures Changes to project structure Improvements to quality and timing of information New ideas / Innovation Closure 47

48 Post Project Evaluation Project Management Issues Project Organisational Structure Lines of Communications Roles and Responsibilities Decision making process Dispute management process Clarity of information / directions Procurement process Project Management Plan 48

49 Post Project Evaluation Benefits Build on-going relationships Repair damaged relationships Improve Project Management Plan Perspective of project performance / success Improve delivery and performance Increase awareness / understanding 49

50 Post Project Evaluation Do it! Make it part of the delivery process Ongoing reviews / feedback Build in to programme Allow costs for running workshops See it as positive exercise Independent facilitator 50

51 Post Project Evaluation Its objective is to get maximum benefit from accrued experience, not to apportion blame CUP Guidance 43 51

52 How to Avoid Project Failure? A final thought - To prevent Project Failure do we need Project Managers, Project Leaders or both? 52

53 Instruct Control Take charge Plan around Managers Analytical, structured, controlled, deliberate and orderly Use the power of the logical mind Determine scope of problem Yearn for stability Think logically Experimental, visionary, flexible, unfettered and creative Use the power of intuition Search for alternative solutions Inspire Empower Thrive on crisis Think laterally Encourage delegation Confront! Leaders. 53

54 How to Avoid Project Failure? Thank you! 54