Organizations spend a lot of money on projects. In the last year alone, the average firm closed US$200 million in projects, according to a just-released study conducted by PM Solutions Research. And more than a third of those projects were troubled. That means US$74 million of those projects were at risk of failure. The good news is that project recoveries are common and firms that proactively undertake successful project recoveries report saving US$50 million on average per firm. Learn what other organizations are doing to recover troubled projects and the significant business results they have been able to realize.

1. Practical Strategies for
Project Recovery
J. Kent Crawford, PMP, PMI Fellow
Originally Presented via Webinar on March 24, 2011
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2. Agenda
 Troubled Projects Defined
 What’s at Stake
 Root Causes of Troubled Projects
 Top Recovery Actions
 Case Studies
 The Positive Influence of Processes
 The Importance of the Project Manager
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3. Troubled Projects Defined
It is unrealistic to have one all encompassing definition of a
troubled project because there are many variables. It is better
to look for indicators that suggest you are there, such as:
 No one really knows when the project will finish and many have
stopped guessing
 Management cannot control the project or assess current status
accurately
 Failure to meet key milestones
 Team is working significant extra hours and team morale is low
 High risk of not delivering anticipated benefits
 Resources are not committed or allocated
 Mounting unresolved technical issues
 Excessive number of risk events and/or change requests
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4. What’s at Stake
Dollars at Risk in the Average Organization: $74 million
(Based on 20,821 projects closed in the last 12 months by 134 organizations)
 Average number of projects closed per firm……………………….155
 Average total cost of closed projects per firm………................$200M
 Average Cost per project………………………………………….$1.3M
 Percentage of projects at risk (recovered 25% or failed 12%) ……….…...37%
Source: Strategies for Project Recovery, PM Solutions’ Research, 2011
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5. Poll Question
What do you think is the Pick list:
main cause of troubled  Planning
projects in your  Resources
organization?
 Requirements
 Risks
 Schedules
 Other
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6. Top 5 Causes of Troubled Projects
Source: Strategies for Project Recovery, PM Solutions’ Research, 2011
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7. Top 5 Actions Taken to Recover Projects
1 Improve Communication
2 Redefine the Project
3 Add and/or Remove Resources
4 Resolve Problematic Technical Issues
5 Replace the Project Manager
Source: Strategies for Project Recovery, PM Solutions’ Research, 2011
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8. 1. Improve Communication / Stakeholder Mgmt.
 Identify stakeholders
 Plan communications - stakeholder analysis
 Distribute information - needs and resources
 Manage stakeholder expectations
 Report performance
Create and support open communication
as the knowledge begins to transfer creative
solutions will emerge that help speed recovery
Source: PMBOK Guide, 4th Edition, PMI, 2008
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9. Case Study
Actions Taken:
A public engagement process was
developed; meetings were held with
stakeholders to explain the need, address
issues, and build support; realistic cost
estimates and schedules were developed.
VELCO was required
to provide a
redundant electrical Result
feed into the area to The project was completed on time and $6
meet regional million under budget. At the same time,
reliability criteria. customer satisfaction scores increased by
However, the project 20%. The project was granted a board
faced public and certificate to proceed six months earlier than
legislative pressures. previous large transmission projects — an
exponential savings of time and money for
VELCO.
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10. 2. Redefine the Project
 Ensure that all stakeholders
understand and follow procedures
 Establish predefined authority and
approval points
 Involve the appropriate people in
decisions
 Evaluate scope, cost/resources,
schedule, and risk
 Define and communicate the
change to project stakeholders
 Document and track the change
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11. Case Study
Actions Taken:
An outside team was assembled to apply
Food and beverage
more rigorous program controls relative to
manufacturer, R&D
scheduling, cost estimating, resource
division
projections, vendor management, and
progress reporting.
The company had less
than two years to
Result
reformulate, test,
produce, and The program was completed six months
distribute over 450 of ahead of schedule and $2 million under
its products in order to budget. A structured program process was
meet deadlines for introduced and implemented, the team was
regulatory compliance. willing to challenge the status quo to simplify
the reformulation process, and clear
accountability ensured work was being
completed as planned.
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12. 3. Add or Remove Resources
Successful recovery projects often hinge on key
resources
 Resources contribute to the problem as well as
the recovery
 Plan carefully for any changes in personnel
 Resource staffing requires a close examination
of key resources
 Establish an effective resource on-boarding and
off-boarding
 A key external resource can be more efficient to
rapidly recover the project
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13. Case Study
Actions Taken:
Global manufacturer Skilled resources were added to lead the
of automotive project. Client/vendor requirements,
components milestones, resource projections, estimates,
and delivery targets were all reset.
A major HR
Transformation Result
Program with 15 All 15 projects within the program were
discreet projects completed on schedule and on budget, with
made little progress no service disruptions. Within seven months
in 8 months, and had of program completion HR expenses were
just 4 more months reduced from US $20 million to $6.8 million
to right-source key per year, and is targeted for a $5 million per
HR functions. year run rate.
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14. 4. Resolve Problematic Technical Issues
 Partner closely with the “owner” of the technical system
 Study the technical issue to understand it’s full range of
effect. A normal technical solution spans functions,
geographies, etc.
 In recovery, the goal should be to fail early….
 Vendor resources can add real technical value
 Leverage vendor technical expertise early in
the assessment and recovery effort
 Understand customer needs in order to frame acceptable
alternative solutions
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15. 5. Replace the Project Manager
 Successful Recovery Project Managers demonstrate a
specialized skill set:
– Knowledge of recovery techniques
– Capability to be frank and honest about
critical issues, urgency, change, etc.
– Decisive
– Proactive
– Political awareness and ability to navigate strong politics
– An understanding of the organizational culture
 If possible, consider a Project Manager skilled in project
recovery to partner with the current PM
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16. Case Study
Manufacturer of Actions Taken:
nutritional products Outside help was brought in to review the
program, re-plan all projects, and assume
A company divestiture control of program operations.
called for an unmovable
deadline to convert Result
legacy IT systems All individual projects within the program
within sales, marketing, were delivered on time and were ready for
and manufacturing integration with the enterprise ERP system.
systems. Little progress The program turnaround quickly saved an
was made in the first 4 estimated US $2 million in system support
months and the fees by moving applications in-house.
program was in peril.
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17. The Importance of the Project Manager
Indicators of an effective recovery PM
 Stakeholders fare well informed and
satisfied.
 Stakeholders trust the PM
 The project team is performing at a high level
 Project milestones are achieved on time
 The PM “owns” the project and accept
responsibility for its status, results, and
delivery
Source: Strategies for Project Recovery, PM Solutions’ Research, 2011
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18. The Positive Influence of Process
The benefit of having a standardized project management
process cannot be overstated. There is a high correlation
between lack of a process and project failure. Some key
data;
 Almost a quarter (22%) of firms surveyed did not have a standard
methodology for managing projects
 Firms without a methodology saw a higher percentage of project
failures than those with (21% vs. 9%)
 Firms with a troubled project recovery process (68% of firms
surveyed) had 3x fewer project failures as those that did not have one
Source: Strategies for Project Recovery, PM Solutions’ Research, 2011
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19. Thank You!
J. Kent Crawford, PMP
kcrawford@pmsolutions.com
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