Great Migrations: getting from A to B
There are many issues with ‘projects’, so it’s difficult to know what to address first. Big players, little players, VPs and other decision makers, managers and management consultants, all have an opinion on the health of projects today.
One thing we mostly agree on: Projects don’t always facilitate the desired business results.
For example, the Standish 2013 Chaos Manifesto found “39% of all projects succeeding (delivered on time, on budget, with required features and functions)”. That means 61% failed to do the same.
Further, a blog post at faethcoaching.com came up with these background tidbits:
- According to an IBMstudy, only 40% of projects meet schedule, budget and quality goals. Further, they found that the biggest barriers to success are people factors.
- Geneca, a software development company, noted from its studies that ‘fuzzy business objectives, out-of-sync stakeholders and excessive rework mean that 75% of project participants lack confidence that their projects will succeed.’
- As I’ve written before, McKinsey recently found that ‘while an increasing number of non-IT executives give IT a score of 61% for basic services like email and laptop support, only 26% rank IT high in the most vital area of proactively engaging with business leaders on new ideas or systems enhancements.’
- The Portland Business Journalfound similarly depressing statistics: “Most analyses conclude that between 65 and 80% of IT projects fail to meet their objectives, and also run significantly late or cost far more than planned.”
- One Canadian study actually stated: “Bad communications between parties are the cause of IT project failures in 57% of cases they studied.”
- KPMGNew Zealand found ‘…and incredible 70% of organizations have suffered at least one project failure in the prior 12 months and 50% of respondents indicated that their project failed to consistently achieve what they set out to achieve.’
Thanks, Frank Faeth, for putting that together.
Specific to the investment side of matters, research by The Boston Consulting Group has found that getting the planned return from your projects has an even worse track record. Return on investment is about getting the benefits – including the impact to your bottom line - that you projected your initiative was going to bring home. And that’s been found to be in the neighborhood of a 5% success rate. This means a humbling 95% of projects fail to get the value they were put on the table to deliver. It's hard to fathom that number - doesn't matter, it could be 60%. It's big.
So why are most organizations on the wrong end of project success?
Consider this thought: Projects fail because the majority of organizations do not plan for success. The mindset is often about control, and not succeeding. Control costs, control the project team, control time, control information. Control ‘outputs’.
You see this often in football (soccer to some of you): Teams that play to control the game, to control momentum, and to control the clock. It can be successful.
And it often fails.
I’ve seen VPs and organizations who play the control game, and sometimes through good luck, good timing, and the all-important BEING IN THE RIGHT PLACE AT THE RIGHT TIME, they are successful. But that’s not the same as having vision and playing to win, and they will fail when the conditions aren’t supportive of a control strategy ‘mindset’. It’s a gamble.
Playing for success requires a mindset shift. If right from the start you plan for success instead of control, your success rate will go up. There are organizations and individuals who do this, and it works. Those are the ones who get the return on their investment; those are the ones who fall into the "5%" success rate the BCG study above refers to.
Planning for success requires strong rituals and well developed processes that take you through the steps to identify and define what success is, and how to get there. The TOP Value Equation, recently introduced in Scandinavia by KeyCore, is a tool that enables you to do this every time you embark on an initiative journey. It gives you the processes to define where you’re going, what you want to achieve, and how to make your desired results measurable in clear, understandable language. It teaches you not only a best practice approach for calculating your financial benefits, but also how to track and report on the finance side over the course of your project and the entirety of the initiative rollout. It promotes focus on value delivery at all times, including during project execution. Every project is a change project.
I’m Nathan Kunkel, Head of Training at KeyCore, and look very much forward to welcoming you on one of our TOP Value Equation Certification Courses this fall or to provide you with the input you need to start using this method in your business and on your projects.
The TOP Value Equation is a Value Delivery Management method that provides the guidance and tools to identify, maximize and map business outcomes in a structured way. It enables you to tie those outcomes to the business benefits, quantify those benefits that have a financial value, and make them transparent, measurable and traceable. Now you can track the outcomes, business benefits and value all the way through the project and implementation until finally realized.