Monday, February 12, 2018

What is project recovery?

As soon as a project is identified as in trouble you can start thinking about project recovery. This sentence already states a very important precondition for a successful project recovery process, namely identifying a project as troubled. It takes a great deal of political savvy and courage to admit that a project is in serious trouble.

Results of a project recovery

A project recovery process can have three possible outcomes:

1) Delivery of the project without significant changes in scope, time and/or costs. This is very rarely and only possible when trouble is identified early and action is taken immediately. For me, this is actually part of regular project management and is not really part of project recovery.  

2) Delivery of the project with significant changes in scope, time and/or costs. There will be an impact on the business case. 

3) Termination of the project because costs and benefits or value are no longer aligned. Note that termination does not necessarily mean that everything done up to this point should be written off as sunk costs. Some part might be salvageable.

Seldom projects get into trouble overnight. There are early warning signs, but most companies seem to overlook them or misunderstand them. Some companies simply ignore the tell-tale signs and continue on hoping for a miracle. Failure to recognize these signs early can make the cost of downstream corrections a very costly endeavor. Also, the longer you wait to make the corrections, the costlier the changes become.

When a project gets way off track, the cost of recovery is high. Recovery costs come in the form of additional costs, reduced scope, longer time to market, changed business case, and others. Additional internal and external resources may be required for corrections and filling skill gaps. In these cases, the ultimate goal for project recovery is no longer to finish on time but to finish with reasonable benefits and value for the customer and the stakeholders. 

Not all troubled projects can be recovered (nor should they). When the project is not regulatory or essential for business continuation, termination is (and should) always be an option.

The project recovery manager

As soon as the decision has been made that a recovery process will be started there will be the need for a project recovery manager. It is not always necessary (or smart) to give the recovery manager also the role of actual project manager. 

Taking over a troubled project is not the same as starting up a new project. Project recovery managers must have a good understanding of what they are about to inherit. This includes:

- A burned out and emotionally drained team
- Poor morale
- An exodus of the talented team members that are always in high demand elsewhere
- A team that may have a lack of faith in the recovery process
- Angry customers
- Nervous management
- Invisible sponsorship and governance
- Either completely passive or highly active stakeholders

Project managers that do not understand what is involved in the recovery of a troubled project can make matters worse by hoping for a miracle and allowing the "death spiral" to continue to a point where recovery is no longer possible. The death spiral continues if we:

- Force employees to work excessive hours unnecessarily
- Create unnecessary additional work
- Replace team members at an inappropriate time.
- Increase team stress and pressure without understanding the ramifications
- Search for new "miracle" tools to solve some of the issues
- Hire consultants that cannot help or make matters worse by taking too long to understand the issues

The project recovery process

A typical project recovery process consists of five phases

1) Mandate phase
2) Review phase
3) Tradeoff & Negotiation phase
4) Correcting & Delivery phase
5) Transition phase

The mandate phase

The purpose of the mandate phase is simple. The project should be identified as troubled, and a project recovery manager should be identified. The mandate of the project recovery manager should be defined clearly. Especially when the recovery manager is working with the current or new project manager instead of replacing him/her. Afterwards, the project recovery manager and his/her should be introduced to everybody that needs to know. 

The review phase

Now that we have a clear mandate, we enter the review phase, which is a critical assessment of the project's existing status. You will look at what went wrong and what can be corrected rather than looking for someone to blame. A project review is all about the probability of project success. A project review will give you a good understanding of the current status of the project and how it is on track to deliver against your definition of project success on three levels:

1) Project delivery success
2) Product or service success
3) Business success

You will find a detailed outline of such a project review in my article "What is a project review?". Note that if the project has a technical component, the project recovery manager should have a strong technical background so that he or she can talk with the technical team on its own level, gaining trust as someone who understands the challenges. This must be coupled with an independent critical eye questioning the direction. Many aspects of technology development can contribute or even cause trouble on a project.

The tradeoff & negotiation phase

Hopefully, by this point, you have the necessary information for decision making as well as the team's support for the recovery. It may be highly unlikely that the original requirements can still be met without some serious tradeoffs. You must now work with the team and determine the tradeoff options that you will present to your stakeholders.

When the project first began, the constraints were most likely the traditional triple constraints. Time, cost and scope were the primary constraints and tradeoffs would have been made on the secondary constraints of quality, risk, value and image/reputation. When a project becomes troubled, stakeholders know that the original budget and schedule may no longer be valid. The project may take longer and may cost significantly more money than originally thought. As such, the primary concerns for the stakeholders as to whether or not to support the project further may change to value, quality and image /reputation. See "The reverse triple constraint of troubled projects" for more background on this.

After defining the tradeoffs, the project recovery manager is ready for stakeholder negotiations provided that there still exists a valid business case. If the review phase indicates that the recovery is not possible and a valid business case does not exist, then there may be no point to negotiate with the stakeholders unless there are issues with which the project recovery manager is not familiar.

The intervention phase

Assuming the stakeholders have agreed to a recovery plan, you are now ready to start the intervention phase of the project. This means: 

- Briefing the team on the outcome of the negotiations 
- Making sure the team learns from past mistakes 
- Introducing the team to the stakeholders' agreed-upon recovery plan including the agreed-upon milestones 
- Introducing any changes to the way the project will be managed 
- Fully engaging the project sponsor as well as the key stakeholders for their support
- Identifying any changes to the roles and responsibilities of the team members 
- Restore team confidence 

"We cannot solve our problems with the same thinking we used when we created them." - Albert Einstein
The way I set up the delivery part of the project with my team(s) at almost every intervention phase I start I described in "A simple and effective project delivery framework". 

The transition phase

As soon as the project is in a normal state again the project recovery manager (when he/she does not have the project manager role) can transfer the responsibility for the recovered project and closes the recovery process. When the project recovery manager also has the role of project manager he/she can decide to close the recovery process and manage the project as if it was a freshly started project or keep the project in a recovery process until the project is finished. 
Posted on Monday, February 12, 2018 by Henrico Dolfing

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