Practical Strategies for Project Recovery Webinar Slides

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Practical Strategies for Project Recovery

J. Kent Crawford, PMP, PMI FellowOriginally Presented via Webinar on March 24, 2011


Agenda

Troubled Projects Defined What’s at Stake Root Causes of Troubled Projects Top Recovery Actions Case Studies The Positive Influence of Processes The Importance of the Project Manager


Troubled Projects Defined

It is unrealistic to have one all encompassing definition of a troubled project because there are many variables. It is better to look for indicators that suggest you are there, such as:

No one really knows when the project will finish and many have stopped guessing

Management cannot control the project or assess current status accurately

Failure to meet key milestones Team is working significant extra hours and team morale is low High risk of not delivering anticipated benefits Resources are not committed or allocated Mounting unresolved technical issues Excessive number of risk events and/or change requests


What’s at Stake

Dollars at Risk in the Average Organization: $74 million(Based on 20,821 projects closed in the last 12 months by 134 organizations)

Average number of projects closed per firm……………………….155 Average total cost of closed projects per firm………................$200M Average Cost per project………………………………………….$1.3M Percentage of projects at risk (recovered 25% or failed 12%) ……….…...37%

Source: Strategies for Project Recovery, PM Solutions’ Research, 2011


What do you think is the main cause of troubled projects in your organization?

Pick list: Planning Resources Requirements Risks Schedules Other

Poll Question


Top 5 Causes of Troubled Projects



Top 5 Actions Taken to Recover Projects

Improve Communication

Redefine the Project

Add and/or Remove Resources

Resolve Problematic Technical Issues

Replace the Project Manager

1

2

4

3

5



Identify stakeholders Plan communications - stakeholder analysis Distribute information - needs and resources Manage stakeholder expectations Report performance

Create and support open communication as the knowledge begins to transfer creative solutions will emerge that help speed recovery

1. Improve Communication / Stakeholder Mgmt.

Source: PMBOK Guide, 4th Edition, PMI, 2008


VELCO was required to provide a redundant electrical feed into the area to meet regional reliability criteria. However, the project faced public and legislative pressures.

Actions Taken:A public engagement process was developed; meetings were held with stakeholders to explain the need, address issues, and build support; realistic cost estimates and schedules were developed.

ResultThe project was completed on time and $6 million under budget. At the same time, customer satisfaction scores increased by 20%. The project was granted a board certificate to proceed six months earlier than previous large transmission projects — an exponential savings of time and money for VELCO.

Case Study


Ensure that all stakeholders understand and follow procedures

Establish predefined authority and approval points

Involve the appropriate people in decisions

Evaluate scope, cost/resources, schedule, and risk

Define and communicate the change to project stakeholders

Document and track the change

2. Redefine the Project


Food and beverage manufacturer, R&D division

The company had less than two years to reformulate, test, produce, and distribute over 450 of its products in order to meet deadlines for regulatory compliance.

Actions Taken:An outside team was assembled to apply more rigorous program controls relative to scheduling, cost estimating, resource projections, vendor management, and progress reporting.

ResultThe program was completed six months ahead of schedule and $2 million under budget. A structured program process was introduced and implemented, the team was willing to challenge the status quo to simplify the reformulation process, and clear accountability ensured work was being completed as planned.

Case Study


3. Add or Remove Resources

Successful recovery projects often hinge on key resources Resources contribute to the problem as well as

the recovery Plan carefully for any changes in personnel Resource staffing requires a close examination

of key resources Establish an effective resource on-boarding and

off-boarding A key external resource can be more efficient to

rapidly recover the project


Global manufacturer of automotive components

A major HR Transformation Program with 15 discreet projects made little progress in 8 months, and had just 4 more months to right-source key HR functions.

Actions Taken:Skilled resources were added to lead the project. Client/vendor requirements, milestones, resource projections, estimates, and delivery targets were all reset.

ResultAll 15 projects within the program were completed on schedule and on budget, with no service disruptions. Within seven months of program completion HR expenses were reduced from US $20 million to $6.8 million per year, and is targeted for a $5 million per year run rate.

Case Study


4. Resolve Problematic Technical Issues

Partner closely with the “owner” of the technical system Study the technical issue to understand it’s full range of

effect. A normal technical solution spans functions, geographies, etc.

In recovery, the goal should be to fail early…. Vendor resources can add real technical value Leverage vendor technical expertise early in

the assessment and recovery effort Understand customer needs in order to frame acceptable

alternative solutions


5. Replace the Project Manager

Successful Recovery Project Managers demonstrate a specialized skill set: – Knowledge of recovery techniques– Capability to be frank and honest about

critical issues, urgency, change, etc.– Decisive– Proactive– Political awareness and ability to navigate strong politics– An understanding of the organizational culture

If possible, consider a Project Manager skilled in project recovery to partner with the current PM


Manufacturer of nutritional products

A company divestiture called for an unmovable deadline to convert legacy IT systems within sales, marketing, and manufacturing systems. Little progress was made in the first 4 months and the program was in peril.

Actions Taken:Outside help was brought in to review the program, re-plan all projects, and assume control of program operations.

ResultAll individual projects within the program were delivered on time and were ready for integration with the enterprise ERP system. The program turnaround quickly saved an estimated US $2 million in system support fees by moving applications in-house.

Case Study


Indicators of an effective recovery PM Stakeholders fare well informed and

satisfied. Stakeholders trust the PM The project team is performing at a high level Project milestones are achieved on time The PM “owns” the project and accept

responsibility for its status, results, and delivery

The Importance of the Project Manager



The Positive Influence of Process

The benefit of having a standardized project management process cannot be overstated. There is a high correlation between lack of a process and project failure. Some key data; Almost a quarter (22%) of firms surveyed did not have a standard

methodology for managing projects Firms without a methodology saw a higher percentage of project

failures than those with (21% vs. 9%) Firms with a troubled project recovery process (68% of firms

surveyed) had 3x fewer project failures as those that did not have one



Thank You!

J. Kent Crawford, [email protected]

Practical Strategies for Project Recovery Webinar Slides

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