IDENT
TIFYING AND RECOV
G VERING TROU
G UBLED
PROJE
ECTS: H
HOW TO RESCUE YOU PRO
O UR OJECT FFROM
ITS FAI
ILURE
Ric
cardo Viana Vargas, M
a MSc, IPMA
A-B, PMP
Professor – Fundação Ge etúlio Vargas (F
FGV) – Brazil
Professor – Fun
P ndação Institut de Administ
to tração (FIA – U
USP) - Brazil
Partner – Macrosolutiions – Brazil
r
ricardo.var
rgas@macrosolu
utions.com.br
© Ricardo V
Viana Vargas. All R
Rights Reserved
Pub
blications
PMI Glo
obal Congress Asia Pacific
Hong KKong - 2007
Mundo PM Magazine
M
Curitiba - October - 2006
1/12

ABSTRAC
CT
The purpos of this a
se article is to c
conceptualiz and iden
ze ntify troubled projects a
and allow
their evaluaation and p
possible reco overy, minim
mizing the im
mpact of th negative effects in
he
the event of a total fa ailure. The word recov very, as use here, ha a meanin that is
ed as ng
different than usual. It does not m mean leading the projec to the int
ct tended succcess from
the plannin phase but to minimiz total failur
ng ze re.
Currently there are lots of pa apers and studies o project manageme
on ent tools,
methodologies, strateggies, and processes. A these effo are inte
All orts ended to ennable and
prepare pr roject manaagers and ttheir teams to ensure the succe of their projects.
s ess
BERRY (20 002) complements this concept saying that virtually all the metho
s odological
patterns of projects a an impo
f are ortant knowledge base on how to properly c
o conduct a
project, completing the work withiin its deadlin and with high-qualit deliverables.
e ne, h ty
However, t reality th many pro
the hat oject managgers make e
evident is sig
gnificantly diifferent. In
fact, even t most ex
the xperienced project mana
p ager end up as acting a a “firemen” to their
p as
projects, tr
rying at any cost to so
y olve the pro
oblems and the difficullties found along the
d
road.
These “Trooubled Projeects” are a r
reality in the worldwide business s
e e scenario; mo of the
ost
times, deaaling with a troubled prroject is a particularly challenging task for th project
p he
manager a and his or her team. T These proje ects require for differe reasons specific
e, ent s,
attention an care.
nd
Finally, the article deals with lesso learned w trouble projects a how to use them
s ons with ed and
to avoid futture problemms.
DEFINITIO OF TRO
ON OUBLED PR
ROJECT
A troubled project can be define as a pro
ed oject where the differen between what is
nce
expected aand what h been ac
has ccomplished exceeds the accepta
d able toleran
nce limits,
pushing int a course that will inev
to vitably lead to failure.
By assessing the natu of the pr
ure rojects, we c say tha any projec is charact
can at ct terized by
a challenge whether f its intrins complex or its short deadline or low cos To this
e, for sic xity e st.
regard, any project re
equires a le
evel of control and ma anagement different frrom usual
engagemen many t
nts, times dema anding a diff
ferentiated effort from the project manager
and his/her team.
r
However, when the variances e exceed an acceptable limit of to
e olerance we have a
e
troubled pr
roject that requires a sp
pecific effor In this case, a specif approach strategy
rt. fic h
becomes necessary, by defining a possible recovery or even d
n g deciding for an early
r
termination
n.
2/12

Exhibit 01 – Con
ntinuous sequence of troubled projec (ESI, 2005).
e cts
It is import
tant to note that troublled projects are not faiiled projects Failed pro
e s s. ojects are
unrecovera able, since t highest level of loss possible h been re
the s has eached. On the other
hand, the ttroubled pro oject has a possibility o being reco
of overed altho
ough it show strong
ws
indications that if it is not manag in a spe
ged ecific manne it can qu
er uickly deterio
orate and
become un nfeasible.
When we use the term “recover” what we mean is tha there is a chance of recovery
u m ”, at f
and not th the reco
hat overy is simp or easy Exhibit 02 shows some of the e
ple y. 2 erroneous
perceptions regarding troubled pr
rojects.
Exhibit 02 – Erroneous p
perceptions on troubled projects.
3/12

IDENTIFY
YING AND A
ASSESSIN A TROU
NG UBLED PRO
OJECT
A troubled project alw
ways presen indicativ factors th might he recogniz it as a
nts ve hat elp ze
problem. SSome aspec related to stakehold
cts o ders, project resources, documenta
t ation, and
the triple constraint (scope, co
ost, and sc chedule) allow us to get a quic direct
ck,
perception of the prob
blem degree the project is in, as sho
e own in Exhibit 03.
Exhibit 03 – Min
ndmap of the indic
cators of a troubled project. Based on SAROKIN (2005 WU (2000), and WARD (2003).
d 5),
Although t the aforemeentioned w
warnings are quite stra
e aightforward it is imp
d, portant to
highlight th none of them indica
hat ates that a project is a isolated p
an problem. Mo of the
ost
times, they operate to
y ogether and indicate, in several wa
n ays, that the is a prob
ere blem with
the project.
In addition to the warn
nings listed before, a s of vital s
set signs and quualitative assessment
models ca be built to develop a more ac
an ccurate crit
terion on th real vitality of the
he
project. KA
AMPUR (200 says tha the vital siigns are me
01) at easured by t variance between
the e
current sta
atus of the project and the values as planne as show in the ex
d s ed, wn xample in
Exhibit 04.
Vital Sign Varia
ance Score
Peercent varian
nce between actual and < 10% 0
planned scheduule 10-20% 1
> 20% 2
Pe
ercent variannce between actual and < 10% 0
bu
udgeted cost 10-20% 1
> 20% 2
Pe
ercentage of contractual deliverables > 90% 0
co
ompleted on s
schedule 80-90% 1
< 80% 2
Pe
ercent varian nce between resources
n < 10% 0
ac
ctually used and budgeted r
resources 10-15% 2
> 15% 4
Number of r risk events with high 1-3 Risks 1
pr
robability and high impact 4-5 Risks 3
Above 6 Rissks 5
Exhibit 04 – Example of vita signs models (KA
4 al AMPUR, 2001).
4/12

ESI Internaational (ESI, 2005) dev
, veloped an assessmen process of troubled projects
nt d
based on a process o interviews analysis a consolid
of s, and dation of res
sults that alllow us to
assess the problem’s potential an the chan
e nd nces of recoovering the project. The process
e
is highlighte in Exhibit 05. In this process the participation of the m
ed t e main stakehoolders and
their persoonal perceptions are th key to t
he the success of a poss
s sible recove of the
ery
project.
Exhibit 05 – Troubled projec assessment mod (ESI, 2005).
ct del
Several oth models can be d
her s developed to identify s scenarios in each org
n ganization.
However, a these mo
all odels should include a brief, quick direct ass
d k, sessment; o
otherwise,
when a pro
oject is identtified as a problem it miight be too llate to recov it.
ver
PROJECT RECOVER VS. PRO
T RY OJECT TER
RMINATIO
ON
Once the t troubled pro
oject is ass
sessed, we have to make the decision of ab borting or
recovering the project. Different factors ma influence this proce
ay e ess, but some basic
consideratiions have t be obser
to rved. LONG (2003) pr
G roposes five key quest
e tions that
should be cconsidered to decide if the project will be reco
overed or ab
borted, as fo
ollows:
1. How importan is the project for the sponsor, the sta
w nt p akeholders, and the
organization?
2. Can the proje continue as plann
n ect ned and de efined or d does it nee to be
ed
commpletely red
defined?
3. The organizatio
e onal impacts and the re esource nee for the recovery ar feasible
eds re
to p
produce the desired rec
e covery?
4. Is th
here a need for political support so that the project can be recovered
d o e d?
5. Are you (the p
e project manager) perso onally motivaated and in nterested to do what
o
nee to be do to recov the proje
eds one ver ect?
As a comp plement to th five prev
he vious questioons, severall factors can evidence that there
n
is no chanc of recove
ce ering the prooject. The m
most commo factors ar as follows
on re s:
→ Bus
siness bene to be gen
efit nerated by t business cannot be delivered
the s
→ The political en
e nvironment is no longer sustainable
e
→ The is no lon
ere nger a projec sponsor and there is no apparen capacity t replace
ct a nt to
them
5/12

→ The business n
e needs have changed
→ The have bee significan changes in technolog
ere en nt i gy
→ Con
ntractual or judicial disp
pute in progress that ma
akes the pro
oject unfeas
sible
→ Market conditio have ch
ons hanged
If you decide to disco
ontinue the project, its early termin
nation can b carried o in two
be out
different wa
ays, each w its own level of com
with mplexity, spe
eed, and stre
ess.
STEWART & SHEREM META (2000) assessed the different drivers and impacts in
) t d nvolved in
the early te
ermination o a project. They say th there are basically fo ways to terminate
of hat e our
a project, a follows:
as
→ Adddition – Disc
continue the project by adding the work to be performed and all its
e
resoources to a larger proje
ect.
→ Abssorption - DDiscontinue the project having ano
other project absorbing the work
t
of t troubled project, w
the d without the r
resources a
and infrastru
ucture accompanying
the work.
→ Inan
nition - Discontinue th project b inanition (starvation), with the r
he by resources
that sustain t
t the project no longer being supplied, and the proje
r d ect being
term
minated due to complet lack of re
e te esources.
→ Extinction - D Discontinue the projec by exting
ct guishing it, with an im
mmediate
canncellation ac
ction being taken, and the projec ceasing to exist and only the
d ct d
wor already completed and that can possibly be used is rec
rk e covered.
In order to group all th
hese concep we dev
pts, veloped the flow chart iin Exhibit 06 starting
6,
with the pproblem ass sessment u to the p
up possible rec
covery strattegies and the early
termination of the proje
n ect.
6/12

Exhibit 06 – Flow chart of the decision-making process identification regarding a troubled project.
e a o
7/12

Regarding the decisio on projec recovery or terminat
on ct tion, we sh hould empha asize that
there is no formula or quantificatiion to suit a projects, in all organ
o all nizations. Ma times
any
the search for the des
sired results can include the cance
e ellation or an
nticipated te
ermination
of a project
t.
DEVELOP
PING THE R
RECOVERY PLAN
Y
When a rec covery strat tegy for a pproject is preepared, man say that it is not imp
ny portant to
know what drove the project to its current s
t status but r
rather to se what can be done
ee n
and will be done to pu it out of t
e ull that situation However, this statem
n. ment is inco orrect. It is
very hard to have a co orrect recov very strategy without kn
y nowing the f facts that cr
reated the
problem. PParticularly, if the drivers are not eliminated, th project m
s he might be rec covered in
the short te
erm, but wit time it can fall back into the sam critical sta it was b
th me age before the
recovery prrocess.
Another im
mportant issu is that re
ue ecovering a project is to save the loss and r
e restore its
usefulness, preventing the projec total faiilure (ESI, 2
g ct’s 2005). Thus, when we intend to
recover a project we are not d
e discussing the full rec covery of t
the project, but the
,
avoidance of its total fa
ailure.
Basically, recovery con
r nsists of rea
adjusting the basics of the scope, schedule, a costs
and
and resour rces of the project, wh hich is methodologically known a the proje
as ect’s triple
constraint, as shown in the projec triangle in Exhibit 07.
n ct
Sco
ope
Cost Sch
hedule
Exhibit 07 – Pro
oject’s triple constr
raint (scope, sched
dule, and cost).
The propos below c be discu
sals can ussed and a
assessed ba
ased on thes constrain
se nts.
Option 1 – Reducing t project scope, maintaining the planned budget and schedule.
the e b
This proces can save parts of the project that may surv without full scope, as shown
ss e vive
in Exhibit 0
08.
8/12

Scope
New
Scope
- =
Cost Schedule Reduced Scope
d Cost Schedule
Troubled Pro
T oject Action Recovered Project
Exhibit 08 – Pro
oject recovery by re
educing scope.
Option 2 – Maintaining project sco
g ope, inflating project co
g osts and ma aintaining the planned
e
schedule. Usually this process is used when project sco cannot be reduced and the
U n ope d
interest in r
results outw
weighs the sh
hortfall caus by an in
sed ncrease in co
osts (Exhibit 09).
t
Scope
Scope
+ =
Sc
chedule Schedule
Cost
Ne
ew
Cost Increase Co
ost
Tr
roubled Proje
ect Action
n Recovered Project
Exhibit 09 – Project recover by increasing av
9 ry vailable budget.
Option 3 – Maintainin project s
ng scope by ex
xtending prooject deadlines and th budget
he
forecast. U
Usually this is used wh
hen schedule is not es
ssentially cr
ritical for the project,
e
where a sloowdown ma avoid an increase in c
ay cost, thus a
allowing us t maintain t scope
to the
(Exhibit 10)
).
Scope
Scope
+ =
Co
ost
Tempo
Cost T
Time
New
Schedule Incr
S rease
S
Schedule
Tr
roubled Proje
ect Action Recovere Project
ed
Exh
hibit 10 – Project r
recovery by extend
ding schedules.
9/12

Option 4 – The proje is totally redefined, thus creatiing a new relationship between
ect y
scope, sch
hedule, and cost, with oonly portions of the orig
ginal project scope. Us
ts sually this
is used when options 1 to 3 are not considere as appro
ed opriate (Exhibit 11).
Scope Useful pa of
art
the Pro
oject
New Project
Cost Schedule
Troubled Pro
oject Act
tion Rec
covered Pro
oject
Exhibit 11 – Full redefinitio of the project, u
on using part of the re
esults obtained.
The four o
options show above a the foun
wn are ndations for any type o recovery. All other
r of .
types and s
solutions proposed are but variatio resulting from one o these optiions.
ons g of
In addition to this resiz
zing of the triple constr
raint, severa other actiions should be taken
al
to ensure tthat the reco
overy attains the expec
s cted success In these c
s. cases, it is n
necessary
not only an radical ch hange in pllanning or in project requirements but also a radical
i s,
change in the behavio of the pe
or eople. LONG (2003) mentions various actions that the
G s
project maanager and t team sh
the hould take t ensure th success of the recov
to he very plan,
as follows:
→ Res
structure the project tea and/or in
e am ncrease the controls ov the work
e ver k.
→ Politically cons
solidate the project with its spon
e nsor, comp
pany execut
tives, and
stakeholders, ssearching fo broad, unrestricted su
or upport.
→ Cre
eate a solid communic
cation program with a positive me
essage in co
onnection
with the chang
h ges.
→ Con
nduct and maintain an optimistic attitude an environm
n nd ment and, h
hoping for
suc
ccess.
→ Ens
sure the per
rsonal comm
mitment to a
assure the success of th recovery strategy.
he
10/12

RECOVER PLAN S
RY SUCCESS F
FACTORS A LESS
AND SONS LEAR
RNED
When cond ducting the assessmen of the troubled project and its p
nt possible recovery it is
possible to say that so
o ome of the le
essons learn need to be present again:
ned o ted
→ Alw
ways prioritiz . There is never time or money to solve all problems.
ze o
→ Be aggressive. Look for th problem a find the solutions.
he and e
→ Pro
oactivity. Do not wait for problems t be solved on their ow
r to d wn.
→ Estaablish acco ountability liines. Know who is re
w esponsible for what w within the
pro
oject.
→ Woorship exper rience. The authority to make dec
o cisions shou be trans
uld sferred to
the most expe erienced pe erson and not necess sarily to the highest hierarchical
e
possition.
→ Find the probllems. Try to identify th problems in a struc
d o he s ctured way and as a
team, thus avo oiding that th project b found due to its prob
he be e blems.
→ Do not microm manage. Details prevent the whole f from being eeasily identif
fied.
→ The real prob
e blem may not be evide ent. It is not always tha what nee to be
t at eds
solvved is wha is more apparent in the proje
at n ect. Check what is be ehind the
currtains.
→ Loo for and as
ok ssess the im
mpacts.
→ Nev miss o
ver opportunities An oppo
s. ortunity los can be one of the biggest
st e
pro
oblems for th project.
he
→ Poo decisions hurt. Makin a wrong decision is as harmful for the proje as not
or s ng ect
decciding at all.
→ Con ntextualize oopinions. Outside opiniions need to be inside a context and must
be integrated.
Finally, it is important to break th cycle tha created the problem You shou always
s he at m. uld
remember the rules of Newton's L
f Law. This la states tha objects in motion ten to stay
aw at n nd
in motion u unless an ou
utside force opposes them.
CONCLUS
SIONS
Preventing a project f from becom ming a challenge requir proactiv action. F
res ve First of all,
recognizing that a pr
g roblem exists is itself already a p problem. Th article “W
he Why Bad
Projects A So Hard to Kill”, p
Are d published by Isabelle Royer in th Harvard Business
b he
Review in 2 2003 (ROYE 2003) has, in its ow title, the search for m
ER, wn more answe on the
ers
difficulty to assess an solve pro
o nd oblems. She says that this is due to an unc
e e conditional
belief that the projec even w
ct, when going through stages of c complete chhaos, will
overcome the obstacles and be a success in the future This perception is co
e. ontagious;
everyone e ends up beliieving that in the future a “miracle” might occ and transform the
e ” cur
project in a huge success.
Unfortunate reality a
ely, always prov to be th opposite of a “mirac
ves he cle”. If we lo again
ook
figure 1, w will note t
we that when the ones inv volved really accept tha there is a problem,
y at
then the prroblem no lo
onger exists. Now, it is a failure.
11/12

Therefore, when are fa
aced with a troubled project, the f
first thing to do is to ac
o ccept that
there is a problem an quickly id
nd dentify its m
magnitude, and the ac ctions that s
should be
immediately taken.
In a project this close to danger, any day lost is a day tha will never be recover.
t t a at ...
REFEREN
NCES
BERRY, D (2002). Y
D. Your Projec is in Tro
ct ouble! Now What? San Antonio Project
w S o:
Manageme Institute Global Congress United States.
ent
ESI Internaational. (20
005). Rapid Assessme
d ent and R
Recovery of Troubled Projects.
f
Arlington: ESI International.
E
HARVEY, J B. (1996 The Abile
J. 6). ene Paradox and Othe Meditatio on Man
x er ons nagement.
New York: Jossey-Bas
ss.
KAMPUR, G. K. (2001 How to K a Troublled Project. San Ramo Center fo Project
1). Kill on: or
Manageme
ent.
LONG, S. P. (2003). Succee eding With Troubled Projects. Baltimore: Project
h d
Manageme Institute Global Congress 2003.
ent
ROYER, I. (2003). Wh Bad Pro
hy ojects Are S Hard to Kill. Boston: Harvard Business
So
Review.
SAROKIN, M. (2005). 10 Indicator of a Troub
rs bled Project EDS Next Big Thing B
t. Blog.
STEWART, W. M. & SHEREME ETA, P. W. (2000). W You Be Terminate Today.
. Will e ed
Houston: P
Project Mana
agement Ins
stitute Globa Congress 2000.
al s
VARGAS, R. V. (20 004). Using Earned V
g Value Mana agement Inndexes as a Team
Developme Factor a
ent and a Comppensation T
Tool. Prague Project M
e: Managemen Institute
nt
Global Con
ngress EMEA
A.
WARD, J. L. (2003). There is a Signpost Up Ahead! Recognizin and Dea
! ng aling with
Project Wa
arning Signs. Baltimore: PMI Global Congress North Amer
rica 2003.
WU, J. (200 Busines Intelligence: Top 10 Warning Sig of a Tro
00). ss gns oubled BI Pr
roject. DM
Review Online website (www.dmr
e review.com).
12/12