Out of sync
by Sarah Fister Gale // illustration by Matt Kenyon
When a project doesn't align with the company's strategic objectives, it's time to make it work... or cut it loose.
Projects that swerve from the company's vision and strategy shouldn't be pursued. Period. It's one of the first rules of good portfolio management—and good business.
Yet the ugly truth is that misfit projects that neither align with the goals of the business nor tap into the core competencies of the team are launched around the world every day. And woe to the project managers who get saddled with one of these “black sheep.”
“They have low probability of success and low expected reward,” says Marcelo Granieri, PMP, IT portfolio management office manager at Standard Bank, Buenos Aires, Argentina. “They receive funding and initial support, but then that support fades over time.”
“ It's a hard choice to get rid of a project that is underway, but a project has to fit with the strategies of the company or it will not add value.”
—Didier Rancher, Global Synergy Group, Paris, France
It's a no-win situation. Even if the projects are delivered successfully—on time, on budget, with goals met— they're still considered failures because they ultimately don't contribute value to the business.
From implementing unnecessary software systems to developing new products or markets that don't fit with the current business strategy, the projects can burn through piles of money and waste precious time if they're not shut down or reconfigured.
But because such projects aren't always obvious contenders for failure, that's easier said than done. Often enough, they're well-intentioned but low-priority efforts, such as maintenance initiatives or technology upgrades that have no major impact on the business. And though they might make sense for a specific team or business division, they might not be right for the organization as a whole.
BEFORE IT'S TOO LATE
Of course, it's best to nip these pesky projects in the bud. And one of the most effective ways of doing that is by investing in a strong governance process that includes a thorough review of every project's business case prior to approval.
As part of that process, portfolio managers and project governing bodies must be authorized to make tough decisions and to hold stakeholders accountable for the projects they promote, says Chris Covey, PMP, manager and instructor at UMT Consulting Group, New York, New York, USA.
“They are the ones most closely in tune with the corporate objectives and they can require project sponsors to make a connection between project goals and business objectives,” Mr. Covey says.
Once a project launches, regular reviews must be conducted to evaluate its progress in terms of corporate objectives. If the project and business goals are still aligned, the project can move ahead. If not, portfolio managers must be empowered to kill it off, says Didier Rancher, general manager at Global Synergy Group, a risk management firm in Paris, France.
“It's a hard choice to get rid of a project that is underway, but a project has to fit with the strategies of the company or it will not add value,” he says.
In today's economy, it's even more imperative that poorly aligned projects not be allowed to move forward.
“In dynamic businesses, changes happen all the time that impact programs and projects,” says Jeffrey Hodgkinson, PMP, PgMP, senior program manager at semiconductor giant Intel, Chandler, Arizona, USA. “Stakeholders approve initiating a program that makes business sense based on the information they have at the time, but six months later the business environment can change and therefore the program is no longer valid.”
At companies like Intel, such situations are not uncommon. “It's why we have project checkpoints,” he says.
Mr. Hodgkinson was recently involved in a service management project that was cut short because “the business needs were going in a new direction,” he says. “The VP made the decision to change directions, and the project was disbanded.”
In fact, most projects aren't set in stone—and executive teams weary of the economic crisis are now more willing to discuss options, Mr. Covey says.
“Governing bodies are much more open to questioning projects than they were a few years ago. Questions are being asked more openly and things are constantly being reassessed,” he says. “There are so many variables that you have to reevaluate projects in flight and ask whether you want to keep going and whether the benefits are really there.”
testing the waters
Some projects may not seem like the perfect fit for an organization's strategy, but they might merit a trial run.
“It's a difficult time to get funding for big projects,” says Chris Covey, UMT Consulting Group, New York, New York, USA. “But sometimes you can find seed money for small activities to demonstrate the value of an idea.”
Starting small often proves to be an effective strategy for exploring cutting-edge technologies that can shape the future of the organization, advises Jeffrey Hodgkinson, PMP, PgMP, Intel, Chandler, Arizona, USA.
“With new technology, you don't necessarily know what's going to work and be marketable, but you've got to consider the risks of not pursuing new ideas,” he says.
At Intel, program managers are given a small budget and time to develop feasibility plans. If a project shows promise, more resources are allocated, until it either generates results impressive enough to channel into a formal program management structure or fails to deliver the intended returns.
Over the years, these seed-money projects have resulted in technologies that enable smaller laptops, offer wireless Internet access and optimize servers for cloud computing.
“I call this work the ‘fuzzy front end,’” Mr. Hodgkinson says. “You don't know exactly what it's going to look like—and not every project is successful—but sometimes they turn into big money-makers.”
And even though project managers are rarely part of the decision-making body approving projects, they are responsible for identifying risks and sharing concerns with the PMO or governing board, says Mr. Granieri.
“The project manager should alert stakeholders if the project is out of order from the original objectives,” he says. “They are the communication link between corporate management and the project itself.”
That doesn't mean just staying on top of internal activities. They also have to consider external forces that could change a project's value proposition.
“The project manager should be able to identify these risks and report if the project is able to adapt to the market realities,” Mr. Granieri says.
In 2008, for example, he was working at Etek Holding Group, an IT security company that felt the crunch of the economic slump when many multinational companies froze their budgets.
“We needed to quickly change our own business strategy and pursue projects that would obtain profits from other sources and services, such as outsourcing, onsite training and resource sharing with regional branches,” Mr. Granieri says. “Good early management allowed us to avoid unprofitable projects and to proactively cancel other projects that no longer made sense.”
Project managers have to walk a fine line when communicating their concerns about a project's value to the stakeholders who will determine its future.
“I wouldn't advise a colleague to take a bullet for any project, but I would encourage them to instigate a thorough, frank discussion, documenting what the assumed benefits of the project are with the sponsor and portfolio management group,” Mr. Covey says.
By focusing the discussion on the initiative's business case and metrics, project managers can underscore the disconnects between project goals and business strategy with facts—not opinions or emotions.
“Openly discuss whether you've made valid assumptions, or whether changes in the scope, schedule or budget made it impossible to achieve your goals,” Mr. Covey says.
Ideally, the conversation will prompt the project sponsor to rethink the decision to move forward. Yet even with all the facts presented, that's not always the case.
“If you can draw connections to strategic goals or link [a ‘black sheep’ project to other projects, to create some positive buzz.”
—Chris Covey, PMP, UMT Consulting Group, New York, New York, USA
“I've been on my fair share of ‘death march’ projects that hang on to the bitter end,” Mr. Covey admits.
In those scenarios, the best bet is to try to align the project with corporate strategy.
“If you can draw connections to strategic goals or link it to other projects, you may be able to create some positive buzz,” he says.
If stakeholders remain determined to continue a questionable initiative, project managers should concentrate on delivering to the expected goals, says Erika Flora, PMP, principal of Beyond 20, a management consulting group in San Diego, California, USA.
Just don't expect smooth sailing. Ms. Flora recently completed an initiative that “went against the best practices of the company and where it was trying to go in terms of creating a minimum level of rigor for every project,” she says.
At one point, Ms. Flora and her team met with the project sponsor and voiced their concern that the effort would create confusion and inconsistency.
“You have to at least tell the sponsor why the project doesn't align with the strategies of the business,” she says. “If not, you don't benefit the company or yourself.”
The sponsor opted to push forward anyway, leaving Ms. Flora and her team little choice but to roll out the program to hundreds of employees across the country.
“It was a disaster,” she admits. “I learned a lot about pet projects that don't align with the strategy of the business.”
The project also proved to be a valuable lesson in how to handle a bad situation. Once her team members realized they had no choice, they agreed to do their best, regardless of personal opinions. “We put our feelings on a shelf and made good on the project,” she says.
The team laid out a plan to please the sponsor and to salvage what it could given the circumstances.
“It brought us closer together as a team,” Ms. Flora says. “We found ways to make the program interesting and fun, and in the end the sponsor was happy, which ultimately was our goal.”
Making the most of black sheep projects is sometimes all you can do, says Mr. Granieri.
“In my experience, the best advice is to finish the project in the correct way—and then start to seek more challenging projects.” PM
PM NETWORK FEBRUARY 2010 WWW.PMI.ORG
FEBRUARY 2010 PM NETWORK