Eight to Late

Sensemaking and Analytics for Organizations

Doing the right project is as important as doing the project right

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Introduction

Many high profile projects fail because they succeed. This paradoxical statement is true because many projects are ill-conceived efforts directed at achieving goals that have little value or relevance to their host organisations.  Project management focuses on ensuring that the project goals are achieved in an efficient manner. The goals themselves are often “handed down from above”, so the relevance or appropriateness of these is “out of scope” for the discipline of project management.  Yet, the prevalence of projects of dubious value suggests that more attention needs to be paid to “front-end” decision making in projects – that is, decision making in the early stages, in which the initiative is just an idea.  A paper by Terry Williams and Knut Samset entitled, Issues in front-end decision making on Projects looks at the problems associated with formulating the “right” project. This post is a summary and review of the paper.

What is the front-end phase of the project?  According to Williams and Samset, “The front-end phase commences when the initial idea is conceived and proceeds to generate information, consolidate stakeholders’ views and positions, and arrive at the final decision as to whether or not to finance the project.”

Decisions made in the early stages of a project are usually more consequential than those made later on. Most major parameters – scope, funding, timelines etc. are more or less set in stone by the time a project is initiated. The problem is that these decisions are made at a time when the availability of relevant information is at its lowest.  This highlights the role of sound judgement and estimation in decision making.  Furthermore, these decisions may have long-term consequences for the organisation, so due care needs to be given to alignment of the project concept with the organisation’s strategic goals.   Finally, as the cliché goes, the only constant is change: organisations exist in ever-changing environments, so projects need to have the right governance structures in place to help navigate through this turbulence. The paper is an exploration of some of these issues as they relate to front-end decision making in projects.

Defining the project concept

Williams and Samset define the terms concept as a mental construction that outlines how a problem will be solved or a need satisfied.  Note that although the definition seems to imply that the term concept equates to technical approach, it is more than that. The project concept also includes considerations of the outcomes and their impact on the organisation and its environment.

The authors emphasise that organisations should to conceive several distinct concepts prior to initiating the project.  To this end, they recommend having a clearly defined “concept definition phase” where the relevant stakeholders create and debate different concepts. Choosing the right concept is critical because it determines how the project will be carried out, what the end result is and how it affects the organisation. The authors emphasise that the concept should be determined on the basis of the required outcome rather than the current (undesirable) situation.

When success leads to failure

This is the point alluded to in the introduction: a project may produce the required outcomes, but still be considered a failure because the outcomes are not aligned with the organisation’s strategy.  Such situations almost always arise because the project concept was not right. The authors describe an interesting example of such a project, which I’ll quote directly from the paper:

One such example is an onshore torpedo battery built inside the rocks on the northern coast of Norway in 2004 (Samset, 2008a). The facility was huge and complex, designed to accommodate as many as 150 military personnel for up to three months at a time. It was officially opened as planned and without cost overrun. It was closed down one week later by Parliamentary decision. Clearly, a potential enemy would not expose its ships to such an obvious risk: the concept had long since been overtaken by political, technological, and military development. What was quite remarkable was that this project, which can only be characterized as strategic failure, got little attention in the media, possibly because it was a success in tactical terms.

A brilliant example of a successful project that failed! The point, of course, is that although the strategic aspects of projects are considered to be outside the purview of project management,  they must be given due consideration when the project is conceptualized. The result of a project must be effective for the organisation, the efficiency of project execution actually matters less.

Shooting straight – aligning the project to strategic goals

Aligning projects with strategic goals is a difficult because the organizational and social ramifications of a project are seldom clear at the start. This is because the problem may be inherently complex – for example, no one can foresee the implications of an organizational restructure (no, not even those expensive consultants who claim to be able to).  Further, and perhaps more important, is the issue of social complexity:  stakeholders have diverse, often irreconcilable, views on what needs to be done, let alone how it should be done.  These two factors combine to make most organizational issues wicked problems.

Wicked problems have no straightforward solutions, so it is difficult if not impossible to ensure alignment to organizational strategy. There are several techniques that can be used to make sense of wicked problem. I’ve discussed one of these – dialogue mapping – in several prior posts. Paul Culmsee and I have elaborated on this  and other techniques to manage wicked problems in our book, The Heretic’s Guide to Best Practices.

One has to also recognize that the process of alignment is messier still because politics and self interest  play a role, particularly when the stakes are high. Further, at the individual level, decisions are never completely objective and are also subject to cognitive bias – which brings me to the next point…

Judgement and the formulation of organizational strategy

Formulating organizational strategy depends on making informed and accurate judgements about the future. Further, since strategies typically cover the mid to long term, one has to also allow some flexibility for adjustments along the way as one’s knowledge improves.

That’s all well and good, but it doesn’t take into account the fact that decision making isn’t a wholly rational process – humans who make the decisions are, at best, boundedly rational (sometimes rational, sometimes not).  Bounded rationality manifests itself through cognitive biases – errors of perception that can lead us to making incorrect judgements. See my post on the role of cognitive bias in project failure for more on how these biases have affected high profile projects.

The scope for faulty decision making (via cognitive bias or any other mechanism) is magnified when one deals with wicked problems. There are a number of reasons for this including:

  1. Cause-effect relationships are often unclear.
  2. No one has complete understanding of the problem (the problem itself is often unclear).
  3. Social factors come into play (Is it possible make an “unbiased” decision about a proposed project that is going to affect one’s livelihood?)
  4. Consequent from points 1 through 3,  stakeholders perceive the problem (and its solution) differently.

It is worth pointing out that project planning is generally “less wicked” than strategy formulation because the former involves more clear cut goals (even though they may be wrong-headed). There is more scope for wickedness in the latter because there are many more unknowns and “unknowables.”

Why estimates are incorrect

Cost is a major factor in deciding whether or not a project should go-ahead. Unfortunately, this is another front-end decision; one which needs to be made when there isn’t enough information available. In his book, Facts and Fallacies of Software Engineering, Robert Glass names poor estimation as one of the top causes of project failure.  This is not to say that things haven’t improved. For example, Agile methods which advocate incremental/iterative development continually refine initial estimates based on actual, measurable progress.

Techniques such as reference class forecasting have been proposed to improve estimation for projects where incremental approaches are not possible (infrastructural projects, for example). However, this technique is subject to the reference class problem.

Finally, all the aforementioned techniques assume that reliable information on which estimates can be based is a) available and b) used correctly.  But this is just where the problem lies: the two key factors that lead to poor estimation are a) the lack of knowledge about what exactly the work entails and b) the fact that people may misunderstand or even misrepresent the information if it is available.

Governance in an ever-changing environment

A negative consequence of the quest for organizational agility and flexibility is that organizational environments are turbulent. The main point of the paper is that traditional project management  (as laid out in frameworks such as PMBOK) Is ill-suited to such environments. As they state:

The key point in this article, however, is that the environment in which most projects operate is complex and turbulent, and conventional project management is not well suited to such conditions, despite the attraction of project organization to companies in fast-moving environments seeking agility and responsiveness…

Yet, ironically, this uncertainty is the reason for the spectacular growth in adoption of project management methodologies (see this post for a discussion of a relevant case study).

For project management to be truly useful, it must be able to cope with and adapt to turbulent environments. To this end, it may be best to view project management as a set of activities that emerge from a real need rather than an arbitrary imposition dictated by methodologies that are divorced from reality. This is nothing new: iterative/incremental methods, which advocate adaptation of methods to suit the environment, are a step in this direction.

Adaptive methods are obviously easier to apply on smaller projects than larger ones. However, one could argue that the need for flexibility and adaptability is even greater on massive megaprojects than smaller ones. A major consequence of a changing environment is that people’s views on what needs to be done diverge. Recent work in applying dialogue mapping to large project environments shows that it is possible to reduce this divergence. Getting people on the “same page” is, I believe, the first step to successful governance, particular in unstable environments.

Lack of information

The most important decisions on projects have to be made upfront, when little or no reliable information is available. The authors argue that the lack of information can actually be a benefit in front-end decision for the following reasons:

  1. Too much information can lead to confusion and analysis paralysis.
  2. Information can get out of date quickly – forecasts based on outdated information can be worse than useless because they can mislead.
  3. It is often hard to tell between important and irrelevant information. The distinction may only become clear as the project proceeds.

Be that as it may, one cannot deny that front-end decision making is hampered by the lack of relevant information. The real problem, though, is that decisions are often made by those who cannot tell the difference between what’s important and what’s not.

Conclusion

The article is an excellent summary of the major impediments in front-end decision making on projects. Such decisions have a major impact on how the project unfolds, yet they are often made with little or no consideration of what exactly the project will do for the organisation, or what its impact will be.

In my experience, front-end decisions are invariably made in an ad-hoc manner, rooted more in hope and fantasy than reality.  A first step to ensuring that organizations do the right project is to ensure that all stakeholders have a common understanding of the goals of the project – that is, what needs to be done. The next is to ensure a common understanding of how those goals will be achieved. Such stakeholder alignment is best achieved using communication-centric, collaborative techniques such as dialogue mapping. Only then,  after ensuring that one is doing the right project,  does it make sense to focus on doing the project right.

6 Responses

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  1. […] This post was mentioned on Twitter by Sara BROCA, Kailash Awati. Kailash Awati said: Doing the right project is as important as doing the project right: http://bit.ly/cZE2Xi […]

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  2. […] not have an adequate appreciation of the problem or the proposed solution. As I have stated in an earlier post: Many high profile projects fail because they succeed. This paradoxical statement is true because […]

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  3. […] have discussed the problems associated with decision making in the early stages of projects in an prior post, so I won’t rehash it […]

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  4. […] Or, even more basic: am I doing the right project? […]

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  5. […] i.e. leads to a surprising process. A common example of this in a project environment is when a  front-end project  decision unfolds in unexpected ways.   Another common example is an organizational change that has unintended […]

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  6. […] If you build a bridge when the customer asked for an elevator, you've failed. The bridge might be perfect – it might be able to carry the weight of 100 elephants and weigh less than a feather – but it's not what the customer asked for, so it doesn't matter. This premise is what a blog post from Eight to Late discusses: the importance of doing the right project. But it seems that discussions early in the project's lifecycle can lead to a successful (but completely misaligned) project moving past the assessment phase and going the whole way through to completion. By taking a step back and determining why a project has been requested, to what end, and how it would be completed. […]

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