Ken VanOverberghe
Ken VanOverberghe

risk management

While most major capital projects tend to be ‘one-offs’ and complex, the root cause of
troubled projects trend towards a few core reasons. More puzzling is often times the executing team identifies the potential problems early enough, then ignores these red flags and proceed, underestimating the magnitude and on-set velocity of the issue until it is too late to recover. In my experience, common root causes of unsuccessful projects include at least one, and often several of the following:

  • Risk management – Project risks are not identified, understood or vetted prior to
    project approval. Once identified, they are often not effectively managed.
  • Poor estimate – Estimates are incomplete or lack detail to support budgeting and
    earned value management.
  • Project team – Project manager or team lack the appropriate skills and expertise.
    Key members changed frequently. Availability is not a skill set.
  • Scope management – Project scope is not fully defined, documented and clearly
    understood.
  • Evolving design – Inability to freeze design at an appropriate time to support the
    overall schedule.  
  • Unachievable schedules – Project delays early in project (see ‘evolving design’) result in a compressed schedule that is often
    unachievable.
  • Insufficient tools - Performance measurement tools
    are inadequate to effectively monitor and report progress.
  • Project coordination – Communication is not open and
    frequent with various stakeholders, with inconsistent messaging due to
    institutionalized bureaucracy.

While the list is not surprising – the fact that it occurs over and over is troubling.
Successful firms learn to anticipate potential issues (has this happened before?), engage key management to monitor progress closely and most importantly, hold individuals accountable for performance.