Wednesday, January 12, 2011

Types of Project Failure

I saw this question on StackExchange and it made me think about all the projects I've been on that have failed in various ways, and at times been both declared a success and in my opinion been a failure at the same time (this happens to me a lot). Michael Krigsman posted a list of six different types a while back, but they are somewhat IT centric and are more root causes than types (not that identifying root causes isn't a worthwhile exercise - it is). In fact, when if you Google for "types of project failures," the hits in general are IT centric. This may not seem surprising, but I think the topic deserves more general treatment. I'm going to focus on product development and/or deployment type projects, although I suspect much can be generalized to other areas.

Here's my list:

  1. Failure to meet one or more readily measurable objectives (cost, schedule, testable requirements, etc)
  2. Failure to deliver value consummate with the cost of the project
  3. Unnecessary collateral damage done to individuals or business relationships

I think these are important because in my experience they are the types of failure that are traded "under the table." Most good project managers will watch their measurable objectives very closely, and wield them as a weapon as failure approaches. They can do this because objective measures rarely sufficiently reflect "true value" to the sponsor. They simply can't, because value is very hard to quantify, and may take months, years, or even decades to measure. By focusing on the objective measures, the PM can give the sponsor the opportunity to choose how he wants to fail (or "redefine success," depending on how you see it) without excessive blame falling of the project team.

Subjective Objective Failure

The objective measures of failure are what receive the most attention, because, well, they're tangible and people can actually act upon them. My definition of failure here is probably a bit looser than normal. I believe that every project involves an element of risk. If you allocate the budget and schedule for a project such that is has a 50% chance of being met - which may be a perfectly reasonable thing to do - and the project comes in over budget but within a reasonably expected margin relative to the uncertainty, then I think the project is still a success. The same goes for requirements. There's going to be some churn, because no set of requirements is ever complete. There's going to be some unmet requirements. There are always some requirements that don't make sense, are completely extraneous, or are aggressive beyond what is genuinely expected. The customer may harp on some unmet requirement, and the PM may counter with some scope increase that was delivered, but ultimately one can tell if stakeholders feel a product meets its requirements or not. It's a subjective measure, but it's a relatively direct derivation from objective measures.

Value Failure

Failure to deliver sufficient value is usually what the customer really cares about. One common situation I've seen is where requirements critical to the system's ConOps, especially untestable ones or ones that are identified late in the game, are abandoned in the name of meeting more tangible measures. In a more rational world such projects would either be canceled or have success redefined to include sufficient resources to meet the ConOps. But the world is not rational. Sometimes the resources can't be increased because they are not available, but the sponsor or other team members chooses to be optimistic that they will become available soon enough to preserve the system's value proposition, and thus the team should soldier on. This isn't just budget and schedule - I think one of the more common problems I've seen is allocation of critical personnel. Other times it would be politically inconvenient to terminate a project due to loss of face, necessity of pointing out an inconvenient truth about some en vogue technology or process (e.g. one advocated by a politically influential group or person), or idle workers who cost just as much when they're idle as when they're doing something that might have value, or just a general obsession with sunk costs.

This is where the "value consummate with the cost" comes in. Every project has an opportunity cost in addition to a direct cost. Why won't critical personnel be reallocated even though there's sufficient budget? Because they're working on something more important. A naive definition of value failure would be a negative ROI, or an ROI below the cost of capital, but it's often much more complicated.

It's also important to note here that I'm not talking about promised ROI or other promised operational benefits. Often times projects are sold on the premise that they will yield outlandish gains. Sometimes people believe them. Often times they don't. But regardless, and usually perfectly possible to deliver significant value without meeting these promises. This would be a case of accepting objective failure because the value proposition is still there, it's just not as sweet as it was once believed to be.

Collateral Damage

Collateral damage receives a fair amount of press. We've all heard of, and most of us have one time or another worked, a Death March project. In fact, when I first thought about failure due to collateral damage, I thought any project causing significant collateral damage would also fall under at least one of the other two categories. It would be more a consequence of the others than a type unto itself. But then I thought about it, and realized experienced a couple projects where I feel the damage done to people was unacceptable, despite the fact that in terms of traditional measures and value delivered they were successful. There's a couple ways this can happen. One is that there are some intermediate setbacks from which the project ultimately recovers, but one or more people are made into scapegoats. Another way arises from interactions among team members that are allowed to grow toxic but never reach the point where they boil over. In my experience a common cause is an "extreme" performer, either someone who is really good or really bad, with a very difficult personality, particularly when the two are combined on a project with weak management.

Now, you might be wondering what the necessary causes of collateral damage are. It's actually fairly simple. Consider a large project that involves a large subcontract. The project may honestly discover that the value contributed by the subcontract does not justify its cost, or that the deliverables of the subcontract are entirely unnecessary. In this case the subcontract should be terminated, which in turn is likely to lead to a souring of the business relationship between the contractor and the subcontractor, along with potentially significant layoffs at the subcontractor. Often times a business must take action, and there will be people or other businesses who lose out through no fault of their own.

Back to Trading Among Failure Types

A Project Manager, along with projects sponsors and other key stakeholders, may actively choose which type of failure, or balance among them, is most desirable. Sometimes this "failure" can even really be success, so long as significant value is delivered. Some of the possible trades include:

  1. Failing to meet budget and schedule in order to ensure value.
  2. Sacrificing value in order to meet budget and schedule...
  3. ...potentially to avoid the collateral damage that would be inflicted in the case of an overt failure
  4. Inflicting collateral damage through practices such as continuous overtime in order to ensure value or completing on target
  5. Accepting reduced value or increased budget/schedule in order to avoid the collateral damage of the political fallout for not using a favored technology or process

Ultimately some of these trades are inevitable. Personally, I strongly prefer focusing on value. Do what it takes while the value proposition remains solid and the project doesn't resemble a money pit. Kill it when the value proposition disappears or it clearly becomes an infinite resource sink. But of course I know this is rather naive, and sometimes preventing political fallout, which I tend to willfully ignore in my question for truth, justice, and working technology; has an unacceptable if intangible impact. One of my most distinct memories is having a long conversation with a middle manager about a runaway project, and at the end being told something like "Erik, I agree with you. I know you're right. We're wasting time and money. But the money isn't worth the political mess it would create if I cut it off or forcefully reorganized the project." I appreciated the honesty, but it completely floored me, because it meant not only that politics could trump money, but politics could trump my time, which was being wasted. Now I see the wisdom in it, and simply try to avoid such traps when I see them and escape them as quickly as possible when I trip over them.

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Laura S said...

hmmm which type you think we're in today? PS - you're behind on your blogging.

Erik Engbrecht said...

We are, of course, succeeding due to the diligent work of our leadership team at providing clear direction to shepherd the rest of us through a very challenging program.

Speaking of being behind on things...I don't think I've seen any meeting minutes or action items recently...

muebles teruel said...

I believe one and all must look at it.