The project management school of hard knocks



Thomas Edison once said, “I have learned more from my failures than my accomplishments.” Whether in invention or project management, this statement appears to be true. Even the best project managers experience project crises and failures. The ability to manage through them is essential for overall project success. To add credence to this statement, responses to numerous surveys rate the ability to effectively manage complaints/crises as one of the most important factors in leadership and customer satisfaction.

Most project management literature and training deals with how to create a successful project by avoiding pitfalls. No one would argue that we should strive to create and run “flawless” projects. In the real world, however, crises do occur. So if they happen, imagine what you would do if during the course of your project, the client had a heart attack? What would you do if the project team you just inherited was on the verge of revolting or quitting? What would you do if your client didn't buy critical facility equipment as promised and you were delivering your information system to that facility within days?

These incidents are real and many of us have encountered similar situations. In these little catastrophes, we find ourselves attending the Project Management School of Hard Knocks. Our goal is to get through these occurrences without damaging our projects, teams, and stakeholders. Still, these “disasters” become defining moments for us. In these situations our decisions could lead to a variety of results ranging from failure to success. The difference between a successful project manager and others is our attitude, how we manage the crisis, what we learn and how we apply these lessons to future endeavors. Successful project managers transform through the experience to become better than ever.

In this paper, we will provide a holistic model for creating effective solutions for project crises. Using the model, we will provide an overview of three real-life examples of project crises and how the project managers managed through them.

A Model for Managing Crisis

Before a Crisis Occurs

Benjamin Franklin stated, “An ounce of prevention is worth a pound of cure.” If your project is sound before a crisis occurs, you will be better able to manage through changes. Sound projects are clearly tied to business objectives, stakeholders understand and are committed to the results, the project manager has strong relationships with the stakeholders, and good project management techniques (e.g., establish baselines, monitoring, controlling, etc.) are practiced. It is never too late to shore up the project. Don't wait until the crisis occurs. Strengthen your project now.

The Anatomy of a Crisis

By understanding the anatomy of a crisis, project managers can be ready to manage through them. According to Webster's Dictionary, a crisis is a “decisive or crucial time.” A crisis is a significant impact to the project, calling into question the validity of the goals and/or ability to complete the project as planned. Crises usually are sudden, unexpected, and may be emotionally charged.

Crisis Stages and a Model for Management

The Stages of a Crisis

When a crisis first occurs, project managers and their stakeholders go through five stages. These stages are Awareness, Yuk, Acceptance, Re-Engagement, and Implementation. It is not usually a matter of if we go through the stages but rather how fast we go through the stages. The project manager should recognize this process exists, know where he or she and the stakeholders are in the process and facilitate everyone reaching a solutions approach as fast as possible.

Stage 1: Awareness

Stakeholders usually go through a period of shock in a crisis. When we get bad news, we have a natural tendency to become defensive. We may deny the event. There is not usually instant awareness and understanding. The key to effectively managing through this stage is to keep an open mind. Really listen and try to understand the event on an objective level while knowing that there is an urge to respond emotionally. As a project manager, you do not have the luxury to “blow up” in public. Stakeholders may not react with the same composure you need to have. It may take awhile before the stakeholders may even admit a problem has occurred.

Exhibit 1. Crisis Management Model

Crisis Management Model
Stage 2: Yuk

This stage may be the hardest for the project manager and the stakeholders. In the Yuk stage, people are definitely aware that a problem exists and often times they are emotional and reactive. They may experience emotions similar to grief. Stakeholders may blame the project manager for the crisis regardless as to who is at fault. Trust may be broken. People in this stage have to work through their emotions. They may not have the capacity to seek solutions at this point.

Stage 3: Acceptance

In this stage, stakeholders acknowledge there is a problem and have worked through their emotions. The danger in this stage is residual Yuk. This may be manifested as apathy or indifference. The project manager must work with the stakeholders to have them accept the situation without a defeatist attitude. Everyone's help will be needed to help find the solutions to get the project back on track.

Stage 4: Re-Engagement

This stage begins the reestablishment of trust and renewed relationships with the stakeholders. Energy returns. Stakeholders reflect, learn lessons, and let go of issues that have prevented progress. With this renewal, people want to move forward and find a solution. When this occurs, the project manager can guide the stakeholders to an effective solution.

Stage 5: Implementation

Implementation marks the transition of the stakeholders back into more traditional project management activities of execution, monitoring, and controlling.

Crisis Management Model

Remember, that as a project manager, you will also pass through these stages. Getting yourself back on track is the most important thing you have to do because you are the one that must get the stakeholders realigned and working on the issues. In the highly charged emotional atmosphere of crises, it may be a good idea for you to talk over your situation with trusted and respected colleagues, or project managers you know through professional organizations. They may be able to provide an objective or new perspective so you can get into a productive, problem-solving mode. With that in mind, Exhibit 1 describes some steps you can take to move stakeholders through the crisis stages.

Projects in Crisis—Real Projects, Real Problems

The Disappearing Customer

The Situation

Personnel changes affect every organization. Key people leave, people are promoted or unforeseen circumstances change how people affiliate with their organizations. Fortunately, as project managers, we have such omnipotent authority that we can forbid such things from affecting our project, right? Wrong. Okay, so personnel changes do affect us. Perhaps one of the biggest changes we face is when one of our primary clients/customers drops out of the picture. This is exactly what happened to Pam, a senior project manager responsible for managing numerous Electronic Medical Record (EMR) projects. She works with physician's offices to create an EMR system to replace/augment hard-copy records and provide improved connectivity between the agencies that need access to those records (hospitals, physicians, insurance companies). This is a complex effort that changes or affects every single process and person in a physician's office. Of course buy-in of the physicians and the staff are key to the success.

The Crisis

Pam was in the project execution stage of one particular project involving a three-physician office. The complexity of establishing an EMR system that could meet the needs of all the physicians had been a challenge. With high cooperation among the physicians, and Pam's ability to prioritize system requirements, she had kept the project on track while meeting their expectations.

Exhibit 2. Disappearing Customer Project Crisis Stages

Disappearing Customer Project Crisis Stages

One afternoon, Pam received a call informing her that one of the physicians had suffered a heart attack. He was expected to recover and return to work soon. However, the physician had decided that since he was not going to practice medicine much longer, he was no longer interested in devoting the energy it would take to learn and use the EMR system. He wanted to keep his practice paper-based. In one phone call everything about Pam's project changed. What would she do?

The Disappearing Customer Project demonstrates all the characteristics of a crisis. The crisis came suddenly with a call that a customer had a heart attack. Pam's clients were upset and concerned about their colleague.

Clearly, the loss of a customer called into question the ability to complete the project. The project relevancy became questionable by the remaining customers.

The Solution

The first thing Pam did was come to terms with the unexpected changes. Many times, project managers have to go through the shock of what happened to the project. The immediate tendency is to deny what happened. The sooner we accept the reality of the crisis, the sooner we can facilitate solutions. Pam then reviewed the project goals with the two other physicians to ensure they still wanted to proceed. The two physicians agreed that they wanted to migrate their parts of the practice to a paperless system. Pam worked with the physicians to revise the objectives and scope. They replanned the time, budget, and resources that would be needed to continue the project. The office will be partially paper-based and partly electronic-based. It may not be the optimal solution, however, it is the most effective solution for the circumstances. They will convert the rest of the records to the EMR system when the other physician retires.

The Directionless Project

The Situation

Have you ever realized you were really lost when you passed the same landmark many times? Projects seem to experience that same phenomenon. When they do, instead of seeing the same landmark over and over, stakeholders ask, “haven't we been here before” or “why aren't our meetings being more productive?” The Employee Wellness Team, a project team responsible for improving employee safety was floundering. This project was critical because the organization valued its employees and wanted to maintain a high level of medical benefits without increasing cost to the organization.

The Crisis

The team understood the employee safety problem but they couldn't decide how to select a course of action. They seemed to be stuck in an endless initiation/planning process. They met time and time again without deciding what to do. They had been chartered six months ago to improve employee safety and little had been done. The first project manager appointed a second project manager to take her place. The new project manager thought a major problem was performance of the first project manager (keeping the discussion at a visionary level) and team fragmentation. She called Larry, an organizational development director within their organization, for team-building exercises.

A project crisis does not have to demonstrate every characteristic of a crisis. For example, the Directionless Project had been experiencing a lack of direction for six months. The crisis did not suddenly appear. However, the stakeholders felt angry, frustrated, and disillusioned because no progress had been made. There was a sense of hopelessness and lethargy. There was a question about the capability of the team to function even though clear project goals had not been established.

The Solution

As Larry listened to the project manager, he quickly realized that team unity wasn't their main issue. In his role as director, Larry had managed many projects, so he realized the symptoms of a directionless project. He knew if the team had a sense of direction and project planning, the project could move forward instead of stagnating. Team factions could more easily be unified and individuals would be energized.

When Larry met with the team, the first thing he had to overcome was the team's sense of lethargy. After all, the team had been struggling for six months and they were tired. He did this by working with the team to establish important elements of the project plan including boundaries/scope, constraints/assumptions, and deliverables. A subteam was formed under the direction of Larry to manage employee education initiatives. As a result of this meeting, the team now had a sense of purpose and direction, the factions had unified, and team members felt energetic. The project plan was used to communicate and coordinate the team actions with the sponsor's committee. Out of the meeting, the sponsors and team agreed that they would create an Employee Safety Awareness Activity as one educational project. The Employee Safety initiative is once again moving forward.

Exhibit 3. Directionless Project Crisis Stages

Directionless Project Crisis Stages

Exhibit 4. When Yes Means No Project Crisis Stages

When Yes Means No Project Crisis Stages

When Yes Means No Project

The Situation

Does yes always mean yes? No, depending on the company or country culture. When this situation occurs, it's almost the same as two outfielders watching each other while the baseball drops between them. It can be comical to watch (especially if it is not your team), but it isn't funny when it occurs on your project. Emily was managing an information system program for a South American organization. Her responsibility was to supply the system. The South American group was responsible for providing the facility and environmental equipment. At least that is what Emily thought based on contractual documentation, meeting minutes, and verbal agreements. The system was going to be shipped in less than 30 days and everything appeared to be on track when Emily received a call from her South American counterpart. He wanted to know when they would receive an elaborate battery backup system for their facility.

The Crisis

Emily's counterpart frequently accepted responsibilities, as a way of being polite, even though he had no authority. Unfortunately, this included his agreement to purchase the battery backup system. Nothing had been done. The battery backup system in question had a 45-day lead-time from purchase to delivery. The information system was scheduled to be delivered in less than 30 days. Furthermore, the equipment would have to go through Customs in both countries causing further delays. No matter who was responsible, shipping the information system and maintaining the project schedule seemed almost impossible.

In international projects, different cultures create different paradigms through which participants view events. In the When Yes Means No Project, there was a serious potential for an emotionally charged event where both sides considered themselves right and justified in their actions. It would be very easy for one side to blame the other resulting in a failed project. However, by knowing the nature of a crisis, it was easier for Emily to become solutions oriented versus blame oriented.

The Solution

Before conceding that the schedule needed to slip, Emily reviewed the assumptions in the project schedule. If she could reduce the shipment time, order processing time, and the amount of time the equipment spent in Customs, perhaps all was not lost. At the moment of the crisis, the South American group was to ship the information system from Miami to South America via ship. She worked with the South Americans to have it flown to its destination, saving about 15 days in the schedule. Then Emily called the battery backup vendor and found ways to expedite the delivery of the equipment to Miami so it could be flown with the information system to South America. Finally, she worked closely with Customs, for both countries, to minimize delays. As a result, the system arrived on time.


Successful project managers manage their crisis by practicing sound project management techniques before crises occur. This includes having a sound project plan, maintaining great stakeholder relationships, and maintaining a hands-on approach to project execution.

Still, crises do occur and are experienced in a five-stage process: Awareness, Yuk, Acceptance, Re-Engagement, and Implementation. Project managers should understand that stakeholders will go through each stage, but the key is facilitating them to move through the stages quickly so problem solving can occur.

When the crisis is over, take time to review the events. What did you as a project manager do well and what could be improved? Where did hidden assumptions and constraints contribute to the crisis? What skills would you like to improve? By reflecting and creating an action plan for your own growth, you will expand your capacity to be effective in any project.


Covey, Stephen R. 1989. The 7 Habits of Highly Effective People: A Fireside Book. New York: Simon and Schuster.

Hargrove, Robert. 1995. Masterful Coaching: Extraordinary Results by Impacting People and the Way They Think and Work Together. San Francisco: Jossey-Bass.

Hiam, Alexander. 1999. Motivating and Rewarding Employees: New and Better Ways to Inspire Your People. Holbrook, MA: Adams Media Co.

Isachsen, Olaf, and Linda V. Berens. 1988. Working Together: A Personality Centered Approach to Management. Coronado, CA: Neworld Management Press.

Keirsey, David. 1998. Please Understand Me II. Del Mar, CA: Prometheus Nemesis Book C.

Kubler-Ross, Elisabeth. 1981. Living with Death and Dying. New York: MacMillan.

Laborde, Genie Z. 1983. Influencing with Integrity: Management Skills for Communication and Negotiation. Palo Alto, CA: Syntony.

Maxwell, John C. 2000. Failing Forward: Turning Mistakes into Stepping Stones for Success. Nashville, TN: Thomas Nelson Inc.

Molden David. 2001. NLP Business Masterclass. New York: Prentice Hall.

Project Management Institute Standards Committee. 2000. A Guide to the Project Management Body of Knowledge. Newtown Square, PA: Project Management Institute.

Scholtes, Peter, R. 1988. The Team Handbook. Madison, WI: Joiner Associates Inc.

Senge, Peter, M. 1990. The Fifth Discipline: The Art & Practice of the Learning Organization. New York: Double Day/Currency.

Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA



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