If these Truths are self-evident, why are they still ignored?
First, these Truths have existed for the most part outside the focus of the conventional project management cost control lens. They have been hidden by a series of strongly held beliefs and adapted expectations that undermine attempts at improvement — these beliefs need to be acknowledged and then set aside.
Executive Management Beliefs
- Believes that ‘better project management’ will solve the problem. In their minds, it’s the project managers' fault.
- Aims for too little and then under-delivers. A lose-lose scenario.
- Conversely, it takes on projects that it is just not capable of delivering successfully. It can start them, but it just doesn't have the required ‘capability’ to deliver the desired results.
- Relies on seemingly competent staff who seem confident, at the outset at least, that they can deliver the results. Hope springs eternal.
- Hope that increasing the levels of control and supervision it will improve the level of results.
- Have ‘dumbed down’ its expectations of projects to such a low level that even failed projects are considered a success as long as they deliver “something”. A process of capital destruction.
- Have you not (until now) had an alternative approach? Even if they wanted to do something, what could they do?
Each of these beliefs is a result of focusing on projects through the project cost control lens. Executive management and the rest of the business now needs to adopt and leverage the business value and investment strategy lenses to increase their project results.
Project Management Beliefs
Meanwhile the project fraternity's project myths …
- Believe that given the right resources and the right support and the right requirements, they can deliver. Failure is someone else’s fault.
- Believe in their methodologies, and that these are a good basis for managing projects.
- Believe the business causes many of the problems due to both its actions and non-actions.
- Believe that projects are hard, subject to numerous challenges, and therefore not too much can be expected.
- See the need to ‘adapt to changing circumstances’ and ‘be flexible’ or ‘agile’ as reasons (excuses?) to change anything and everything along the way citing absolute rigidity as the alternative.
A core element of TOP is challenging these belief systems and perspectives through strategic investment and business value-focused lenses. Explore why these are false beliefs in our ebook, 'The 19 Myths that are destroying your projects'.
Missed, Lost And Destroyed
Given these beliefs, is it any wonder that we find most projects miss, lose, or destroy more value than they deliver. Shocked? Don't believe it? But it's true. It's only because much of this value delivery loss is not visible that it hasn't been seen as a problem.
Over the past 20 years, we've found that today’s cost control approaches lead to lost value in many ways.
For example, they:
- Miss 25% or more of a project’s potential value in the business case by not identifying the true business outcomes and all their benefits. That’s a quarter of the potential value gone before you even start!
- Miss the available 20% reduction in business complexity (and costs) by minimizing the time spent on defining and simplifying the business requirements. This missed 20% reduction not only results in higher solution and project costs but in continuing higher ongoing operational costs as well.
- Lose value because they lack overall clarity at all levels of the project, requiring up to 35% of project time to be spent on rework. While you don’t want rework time to be zero, you don’t want it to be above 15% either. Reducing the need for rework releases15-20% of project time and effort for more productive work and faster, lower-cost delivery.
- Lose value by not aligning – from the outset – every aspect of the project to deliver the desired business outcomes and benefits. Most projects (over 90%) never identify their true business outcomes at all in clear, specific, measurable terms. This lack of business alignment often allows a large gap to exist between the available value the project delivers and what the business should realize. Between 20% and 50% of the targeted value can fall through this gap.
- Lose value by not planning, tracking, or governing the delivery of post-project benefits, allowing them to ‘fall by the wayside’. Post-project benefits frequently represent over 50% of potential benefits.
- Destroy value by not actively sustaining achieved benefits, and allowing old habits, old processes, and unnecessary extra steps to be reinstalled. Five percent or more of gains made can be lost if not actively sustained.
And then, more visibly, projects…
- Destroy value by delivering the projects late (delaying the start of benefits realization) and over budget (reducing the net value of the benefits). Research consistently finds that around 60%-70% of projects fail on one or both of these two dimensions.
- Lose value by ‘adjusting’ the project’s scope to fit the agreed timeframe or budget, resulting in the loss of yet more value. As few projects can align their project activities to the planned benefits, any scope change is usually done with little to no knowledge as to its value impacts.
- In addition, another 15% of projects fail, vaporize, get canceled, or otherwise deliver nothing for the time, effort, and costs involved, destroying all value.
Frighteningly, these results have not improved in many years even though the cost of project failure is phenomenal. Research on just IT projects commissioned in Australia found that improving project delivery performance could increase the banked returns from 30% to 240%, an eightfold increase in returns. Even if you only attained half of this increase, you’ll have moved from 30% to 135% returns — a prize worth pursuing.
All of these poor project delivery performance statistics just emphasize the size of the prize available. And that ‘ignoring the truths’ is expensive — very expensive!