quantmleap

A quick recap

Over the past week I’ve had an interesting discussion with Steven Romero about certain aspects associated with the use of the Standish Chaos Report generally, and how prevalent project failures are specifically.

I’ll skip the discussion we’ve had regarding the validity of the Chaos Report as we both agreed that it is flawed and misleading.

The discussion took on an interesting turn when we started discussing the very nature of what constitutes a failure and, more specifically, is it correct to say that many projects actually fail.

Current Conventional Wisdom

The current conventional wisdom seems to suggest that too many project fail. In an earlier exchange with Patrick Richard I’ve made the observation that in any human endeavor there will always be a line over which further improvements will require infinite levels of resources to attain. Patrick was suggesting in his post that projects’ success rate has flat lined over the years. My response to this was that the reason it looks like we don’t achieve a higher level of success rate is because we have probably reached that level beyond which far greater resources will be required in order to get that line any higher.

Patrick reminded me, quite correctly, that my assertion that a higher level of success rate is not possible is not quite correct as evident from our Space Exploration Projects, where a high degree of success is achieved. This is an absolutely valid point, which in my mind just strengthen my argument, because most projects are not run as space exploration projects, the reason being that in most traditional projects the cost of failure will not necessarily translate to massive explosions or costly loss of human lives. In that respect in most projects there is an acceptance of potential failure by the virtue of limiting budgets. So its not that we can’t do better, it is just that in the main we look at our opportunity costs and make a decision to take the risk of failing. Had our level of tolerance been adjusted to that applied to space exploration projects we would not have had nearly as many ‘failed projects’ as we seem to experience now.

Back to Steven’s Arguments

So now back to Steven’s arguments. I’ve referred him to my discussion with Patrick (as above) and he didn’t quite agree with my arguments (i.e where I suggest that not that many projects actually fail – Steven’s view is that there are far too many project failures). Steven’s rational to his conclusion is based on his definition of what constitutes a failed project. Let’s examine this closely:

Project failure occurs when:

1. Organizations invest in the wrong projects (not those most essential to meeting Enterprise Strategy)
2. The speed of the project does not meet the needs of the business (projects are approved predicated on when value is expected to be realized)
3. The value of the project is not commensurate to the investment in the project (and I find most organizations are not even able to accurately determine investment value – and sometimes, the “actual” cost of the project, which includes indirect, business process change, and full-life-cycle costs)

My response to the above is as follows:

1. Investment in the wrong project is an organizational issue that has got nothing to do with the projects themselves. This factor cannot be included in the definition of a failed project.
2. Where the speed of delivery does not meet the business needs, provided that all other factors have been made (i.e. cost, quality, etc) – that should not be categorically classified as failed project. The best source I found for substantiating this point is another post by Steven, titled “Common IT Project Management Mistakes” where he makes the following correct observation: “There is a classic project management saying: Cost, Schedule or Performance – pick any two. Project Managers must know which of these Project Success Factors is most critical in regard to project success.” This says it all. Speed  (i.e. schedule) can in certain circumstanced be compromised provided that Cost and Performance haven’t been affected.
3. Cost vs. Value – again this also is an organizational issue and have nothing to do with the projects themselves.

To Summarize

So, in summary, things are not as bad as they seem. As I quoted in my earlier post “The increasingly blatant nature of the nonsense uttered with impunity in public discourse is chilling. Our democratic society is imperiled as much by this as any other single threat, regardless of whether the origins of the nonsense are religious fanaticism, simple ignorance or personal gain.”

I couldn’t agree more.

Related posts:

1. Projects failure rate – the conventional wisdom is wrong!
2. Projects failure rate – the sequel