n

Understanding Troubled Projects

n “Root” Causes of Failure
n The Definition of Failure
n Early Warning Signs of Trouble
n Selecting the Recovery Project
Manager (RPM)
n Recovery Life Cycle Phases

Recovery Project Management:

Techniques and Tactics For
Reversing Failing Projects
By Harold Kerzner, Ph.D.
Sr. Executive Director for Project Management
International Institute for Learning, Inc.

Understanding Troubled Projects at the end of the project

Professional sports teams treat each new season as a • Troubled projects do not go from “green” to “red”
project. For some teams, the only definition of success overnight
is winning the championship, while for others success is • There are early warning signs, but they are often
viewed as just a winning season. Not all teams can win overlooked or misunderstood
the championship, but having a winning season is certainly • Most companies have a poor understanding of how to
within reach. manage troubled projects
At the end of the season, perhaps half of the teams will • Not all project managers possess the skills to manage a
have won more games than they lost. But for the other troubled project
half of the teams who had losing records, the season (i.e.
project) was a failure. When a project failure occurs in Not all projects will be successful. Companies that have
professional sports, managers and coaches are fired, there a very high degree of project success probably are not
is a shakeup in executive leadership, some players are working on enough projects and certainly are not taking
traded or sold to other teams, and new players are brought on very much risk. These types of companies eventually
on board. These same tactics are used to recover failing become followers rather than leaders. For companies that
projects in industry. desire to be leaders, knowledge on how to turn around a
failing or troubled project is essential.
There are some general facts about troubled projects:
Projects do not get into trouble overnight. There are early
• Some projects are doomed to fail regardless of recovery warning signs, but most companies seem to overlook
attempts them or misunderstand them. Some companies simply
• The chances of failure on any given project may be ignore the tell-tale signs and continue on hoping for a
greater than the chances of success miracle. Failure to recognize these signs early can make
• Failure can occur in any life cycle phase; success occurs the cost of downstream corrections a very costly endeavor.

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Also, the longer you wait to make • Poor estimates, especially financial the project with little regard for the
the corrections, the more costly the • Unclear stakeholder requirements schedule
changes become. • Poor or fragmented cost control
• Passive user stakeholder
Some companies perform periodic involvement after handoff • Each stakeholder uses different
project health checks. These health • Unclear expectations organizational process assets,
checks, even when applied to healthy which may be incompatible with
looking projects, can lead to the • Assumptions, if they exist at all, are the assets of project partners
discovery that the project may be in unrealistic
• Weak project and stakeholder
trouble even though on the surface • Plans are based upon insufficient communications
the project looks healthy. Outside data
consultants are often hired for the • Poor assessment of risks if done at
• No systemization of the planning all
health checks in order to get an process
impartial assessment. The consultant • Wrong type of contract
rarely takes over the project once the • Planning is performed by a
planning group • Poor project management;
health check is completed, but may team members possess a
have made recommendations for • Inadequate or incomplete poor understanding of project
recovery. requirements management, especially virtual
When a project gets way off track, the • Lack of resources team members
cost of recovery is huge and vast or • Assigned resources lack experience • Technical objectives are more
even new resources may be required • Staffing requirements are not fully important than business objectives
for corrections. The ultimate goal known
for recovery is no longer to finish on These causes of project failure can be
• Constantly changing resources sorted into three broad categories:
time, but to finish with reasonable
benefits and value for the customer • Poor overall project planning • Management mistakes: These
and the stakeholders. The project’s • Enterprise environmental factors are due to a failure in stakeholder
requirements may change during have changes causing outdated management perhaps by allowing
recovery to meet the new goals if they scope too many unnecessary scope
have changed. But regardless of what changes, failing to provide proper
• Missed deadlines and no recovery governance, refusing to make
you do, not all troubled projects can
plan decisions in a timely manner, and
be recovered.
• Budgets are exceeded and out of ignoring the project manager’s
“Root” Causes of Failure control quest for help. This can also be
There are numerous causes of • Lack of replanning on a regular the result of wanting to gold-plate
project failure. Some causes are basis the project. This is also the result
quite common in specific industries, of not performing project health
• Lack of attention provided to the
such as information technology, checks.
human and organizational aspects
whereas others can appear across all of the project • Planning mistakes: These
industries. Below is a generic list of are the result of poor project
• Project estimates are best guesses
common causes of failure: management, perhaps not
and not based upon history or
• End user stakeholders not involved following the principles stated in
standards
throughout the project the PMBOK® Guide, not having
• Not enough time provided for a timely “kill switch” in the plan,
• Minimal or no stakeholder backing; proper estimating not planning for project audits or
lack of ownership
• No one knows the exact major health checks, and not selecting
• Weak business case milestone dates or due dates for the proper tracking metrics.
• Corporate goals not understood at reporting • External influences: These are
the lower organizational levels • Team members working with normally the failures in assessing
• Plan asks for too much in too little conflicting requirements the environmental input factors
time • People are shuffled in and out of correctly. This includes the
timing for getting approvals and

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 authorization from third parties, Typical early warning signs include: and evaluation of the early warning
and a poor understanding of the • Business case deterioration signs can tell us that the distressed
host country’s culture and politics. project:
• Different opinions on project’s
The Definition of Failure purpose and objectives • Can succeed according to the
original requirements but some
Historically, the definition of • Unhappy/disinterested minor changes are needed
success on a project was viewed stakeholders and steering
committee members • Can be repaired but major changes
as accomplishing the work within
may be necessary
the triple constraints and obtaining • Continuous criticism by
customer acceptance. Today, the stakeholders • Cannot succeed and should be
triple constraints are still important killed
• Changes in stakeholders without
but it has taken a “back seat” to the any warning There are three possible outcomes
business and value components of when managing a troubled project:
success. In today’s definition, success • No longer a demand for the
is when the planned business value deliverables or the product • The project must be completed; i.e.
is achieved within the imposed • Invisible sponsorship required by law
constraints and assumptions, and the • Delayed decisions resulting in • The project can be completed but
customer receives the desired value. missed deadlines with major costly changes to the
requirements
While we seem to have a • High tension meetings with team
reasonably good understanding of and stakeholders • The project should be canceled
project success, we have a poor • Finger-pointing and poor - Costs and benefits or value are
understanding of project failure. The acceptance of responsibility no longer aligned
project manager and the stakeholders
• Lack of organizational process - What was once a good idea no
can have different definitions of
assets longer has merit
project failure. The project manager’s
definition might just be not meeting • Failing to close life cycle phases Some project cannot be cancelled
the triple constraints criteria. properly because they are required by
Stakeholders, on the other hand, • High turnover of personnel, law. These include compliance to
seem more interested in business especially critical workers government laws on environmental
value than the triple constraints issues, health, safety, pollution,
• Unrealistic expectations etc… For these projects, failure is
once the project actually begins.
Stakeholders’ perception of failure • Failure in progress reporting not an option. The hardest decision
might be: • Technical failure to make is obviously to hit the “kill
• The project has become too costly switch” and cancel the project.
• Having to work excessive hours and
for the expected benefits or value Companies that have a good grasp
with heavy work loads
on project management establish
• The project will be completed too • Unclear milestones and other processes to make it easy to kill a
late requirements project that cannot be saved. There
• The project will not achieve its • Poor morale is often a great deal of political and
targeted benefits or value cultural resistance to kill a project.
• Everything is a crisis
• The project no longer satisfies the Stakeholder management and project
• Poor attendance at team meetings governance play a serious role in
stakeholders’ needs
• Surprises, slow identification of the ease by which a project can be
EARLY WARNING SIGNS OF TROUBLE problems, and constant rework terminated.
Projects do not become distressed • Poor change control process Selecting the Recovery Project
overnight. They normally go from Manager (RPM)
The earlier the warning signs are
“green” to “yellow” to “red”, and
discovered, the more opportunities Companies often hire outside
along the way are early warning signs
exist for recovery. This is the time consultants to perform a health check
that failure may be imminent or that
when a project health check should be on a project. If the health check report
immediate changes may be necessary.
conducted. Successful identification

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indicates that an attempt should • Invisible sponsorship and first four phases in Figure 1 are used
be made to recover the troubled governance for problem assessment and to
project, then perhaps a new project • Either invisible or highly active evaluate and hopefully verify that the
manager should be brought on stakeholders project may be able to be saved. The
board with skills in project recovery. last two phases are where the actual
Outside consultants normally do Project managers that do not recovery takes place.
not take over the troubled project understand what is involved in the
because they may not have a good recovery of a troubled project can Figure 1: Life Cycle Phases for
grasp of the company’s culture, make matters worse by hoping for Recovery Project Management
business and project management a miracle and allowing the “death
processes, politics and employee spiral” to continue to a point where Evaluation Phases Recovery Phases

working relationships. Not all project recovery is no longer possible. The UND AUD TRA NEG RES EXE
managers possess the skills to be death spiral continues if we:
Understand Audit Tradeoffs Negotiate Restart Execute

an effective RPM. In addition to • Force employees to work excessive

possessing project management hours unnecessarily
knowledge, typical skills needed The Understanding Phase
• Create unnecessary additional
include:
work U A T N R E
• Strong political courage and
• Replace team members at an
political savvy The purpose of the understanding
inappropriate time.
• A willingness to be totally honest phase is for the newly assigned
• Increase team stress and pressure RPM to review the project and its
when attacking and reporting the
without understanding the history. To do this, the RPM will need
critical issues
ramifications some form of mandate or a project
• Tenacity to succeed even if it
• Search for new “miracle” tools to charter that may be different than
requires a change in resources
solve some of the issues that of his predecessor. This must be
• An understanding that effective done as quickly as possible because
• Hire consultants that cannot help
recovery is based upon time is a constraint rather than a
or make matters worse by taking
information, not emotions. luxury. Typical questions that may be
too long to understand the issues
Recovering a failing project is like addressed in the mandate include:
Recovery Life Cycle Phases • What authority will you have to
winning the “World Series of Poker”.
In addition to having the right skills, A company’s existing enterprise access proprietary or confidential
some degree of luck is also required. project management methodology information? This includes
may not be able to help recover information that may not have
Taking over a troubled project is not
a failing project. After all, the been available to your predecessor,
the same as starting up a new project.
company’s standard enterprise project such as contractual agreements
Recovery project managers must have
management methodology (EPM), and actual salaries.
a good understand of what they are
which may not have been appropriate • What support will you be given
about to inherit. This includes:
for this project, may have been a from the sponsor and the
• A burned out team contributing factor to the project’s stakeholders? Are there any
• An emotionally drained team decline. It is a mistake to believe indications that they will accept
• Poor morale that any methodology is the miracle less than optimal performance
cure. Projects are management by and a descoping of the original
• An exodus of the talented team people, not tools or methodologies. A requirements?
members that are always in high different approach may be necessary
demand elsewhere • Will you be allowed to interview
for the recovery project to succeed.
the team members in confidence?
• A team that may have a lack of
Figure 1 below shows the typical life • Will the stakeholders overreact
faith in the recovery process
cycle phases for a recovery project. to brutally honest findings even
• Furious customers These phases can significantly if the problems were caused by
• Nervous management differ from the company’s standard the stakeholders and governance
methodology life cycle phases. The groups?

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Included in this phase are the possess the proper skills, the roles and perhaps on a one-on-one basis
following: responsibilities are assigned to the • Re-establishing work-life balance
• Understanding of the project’s correct team members, the project’s
priority is correct and will support • Re-establishing incentives, if
history possible
the recovery efforts, and executive
• Reviewing the business case, support is in place. The recovery of It can be difficult to interview people
expected benefits, and targeted a failing project cannot be done in and get their opinion on where we
value isolation. It requires a recovery team are, what went wrong, and how to
• Reviewing the project’s objectives and strong support/sponsorship. correct it. This is especially true if the
• Reviewing the project’s The timing and quality of the people have hidden agendas. If you
assumptions executive support needed for have a close friend associated with
• Familiarizing yourself with the recovery is most often based upon the project, how will you react if they
stakeholders, their needs and the perception of the value of the are found guilty of being part of the
sensitivities project. Five important questions that problem? This is referred to as an
need to be considered as part of value emotional cost.
• Seeing if the enterprise
environmental factors and determination are: Another problem is that people may
organizational process assets are • Is the project still of value to the want to hide critical information if
still valid client? something went wrong and they
could be identified with it. They might
The Audit Phase • Is the project still aligned to your
view the truth as impacting their
company’s corporate objectives
U A T N R E and strategy?
chances for career advancement. You
may need a comprehensive list of
Now that we have an understanding • Is your company still committed to questions to ask to extract the right
of the project’s history, we enter the project? information.
the audit phase which is a critical • Are the stakeholders still
When a project gets into trouble,
assessment of the project’s existing committed?
people tend to play the “Blame
status. The following is part of the • Is there overall motivation for Game” trying to make it appear that
audit phase: rescue? someone else is at fault. This may be
• Assessing the actual performance an attempt to muddy the water and
to date Since recovery cannot be
accomplished in isolation, it is detract the interviewer from the real
• Identifying the flaws important to interview the team issues. It is done as part of one’s sense
• Performing a root cause analysis members as part of the audit phase. of self preservation. It may be difficult
This may very well be accomplished to decide who is telling the truth and
- Looking for surface (or easy to who is fabricating information.
identify) failure points at the beginning of the audit phase
to answer the previous questions. You may conclude that certain people
- Looking for hidden failure points The team members may have strong must be removed from the project
• Determining what are the “must opinions on what went wrong as if it is to have a chance for recovery.
have”, “nice to have”, “can wait” well as good ideas for a quick and Regardless what the people did, you
and “not needed” activities or successful recovery. You must obtain should allow them to leave the project
deliverables support from the team if recovery is with dignity. You might say, “Annie is
• Looking at the issues log and seeing to be successful. This includes: being reassigned to another project
if the issues are people issues. If • Analyzing the culture that needs her skills. We thank her
there are people issues, can people for the valuable contribution she has
• Data gathering and assessment
be removed or replaced? made to this project.”
involving the full team
The audit phase also includes the • Making it easy for the team to Perhaps the worst situation is when
validation that the objectives are discuss problems without finger- you discover that the real problems
still correct, the benefits and value pointing or the laying of blame were with the project’s governance.
can be met but perhaps to a lesser Telling stakeholders and governance
• Interviewing the team members
degree, the assigned resources groups that they were part of the

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problem may not be received well. that the team will present to the • Have the features changed?
The author’s preference is always to customer and stakeholders will then • What are the risks?
be honest in defining the problems be tradeoffs on time, cost, scope and
even if it hurts. This response must be possibly risk. Once the tradeoffs have been
handled with tact and diplomacy. discovered, the RPM and the team
One way of looking at tradeoffs is must prepare a presentation for the
You must also assess the team’s to review the detailed WBS and stakeholders. There are two primary
morale. This includes: identify all activities remaining to be questions that the RPM will need to
• Looking at the good things first to accomplished. The activities are then discuss with the stakeholders:
build morale placed on the grid in Figure 4. The
“must have” and “nice to have” work • Is the project worth saving? If the
• Determining if the original plan was packages or deliverables are often the project is not worth saving, then
overly ambitious most costly and the hardest to use for you must have the courage to say
• Determining if there were political tradeoffs. If vendors are required to so. Unless a valid business reason
problems that led to active or provide work package support, then exists for continuation, you must
passive resistance by the team we must perform vendor tradeoffs as recommend cancellation.
• Determining if the work hours and well, which include: • If the project is worth saving, can
work loads were demoralizing • Assessing vendor contractual we expect a full or partial recovery,
agreements and by when?
The Tradeoff Phase
• Determining if the vendor can fix Figure 3: the MODIFIED triple
U A T N R E the problems constraint
Hopefully by this point you have the • Determining if vendor concessions
necessary information for decision- and tradeoffs are possible
making as well as the team’s support • Establishing new vendor schedules
for the recovery. It may be highly and pricing
unlikely that the original requirements
can still be met without some serious Figure 2: the triple constraint
tradeoffs. You must now work with
the team and determine the tradeoff
options that you will present to the
stakeholders.
There are also other factors that most
When the project first began, the
likely are concerns of the stakeholders
triple constraints most likely looked
and must be addressed. These factors
like what you see in Figure 2. Time,
include:
cost and scope were the primary
constraints and tradeoffs would • Changes In the political
have been made on the secondary environment
constraints of quality, risk, value and Once all of the elements are placed • Existing or potential lawsuits
image/reputation. When a project on the grid in Figure 4, the team
will assist the RPM with tradeoffs by • Changes in the enterprise
becomes distressed, stakeholders
answering the following questions: environmental factors
know that the original budget and
schedule may no longer be valid. • Where are the tradeoffs? • Changes in the organizational
The project may take longer and process assets
• What are the expected casualties?
may cost significantly more money • Changes in the business case
than originally thought. As such, the • What can and cannot be done?
• Changes in the assumptions
primary concerns for the stakeholders • What must be fixed first?
as to whether or not to support • Changes in the expected benefits
• Can we stop the bleeding? and final value
the project further may change to
value, quality and image/reputation • Have the priorities of the
as shown in Figure 3. The tradeoffs constraints changed?

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The Negotiation Phase milestones control process

U A T N R E • Identifying any changes to the way • Performing periodic critical health

the project will be managed checks and using earned value
At this point, the RPM is ready for • Fully engaging the project sponsor measurement reporting
stakeholder negotiations. Items as well as the key stakeholders for • Providing effective and essential
that must be addressed as part of their support communications
stakeholder negotiations include:
• Identifying any changes to the roles • Maintaining positive morale
• What items are important to the and responsibilities of the team • Adopting proactive stakeholder
stakeholders? (i.e. time, cost, value, members management
etc...)
There are three restarting options. • Not relying upon or expecting the
• Prioritization of the tradeoffs These include: company’s EPM system to save you
• Honesty in your beliefs for recovery • Full anesthetic: bring all work to a • Not allowing unwanted stakeholder
• Not giving them unrealistic standstill until the recovery plan is intervention, which increases
expectations finalized pressure
• Getting their buy-in • Partial anesthetic: bring some work • Carefully managing stakeholder
• Negotiating for the needed to a standstill until the scope is expectations
sponsorship and stakeholder stabilized
• Insulating the team from politics
support • Scope modification: continue work
but with modifications as necessary Recovery project management is not
Figure 4: tradeoff categories easy, and there is no guarantee you
Albert Einstein once said: “We cannot can or will success. You will be under
solve our problems with the same close supervision and scrutinized by
thinking we used when we created superiors and stakeholders. You may
them.” It may be necessary to bring even be required to explain all of
on board new people with new ideas. your actions. But saving a potentially
However, there are risks. You may troubled project from disaster is
want these people full-time on your certain worth the added effort.
project but retaining highly qualified
workers that may be in high demand
elsewhere could be difficult. Since
your project most likely will slip,
some of your team members may be
committed to others projects about
to begin. However, you may be lucky
enough to have strong executive-level
The Restart Phase sponsorship and retain these people.
U A T N R E This could allow you to use a co-
located team organization.
Assuming the stakeholders have
agreed to a recovery process, you are The Execution Phase Other Kerzner White Papers:
now ready to restart the project. This
includes:
U A T N R E n Project Health Checks
• Briefing the team on stakeholder During the execution phase, the n The Future of Project
negotiations project manager must focus upon Management
• Making sure the team learns from certain back-to-work implementation
n Twenty Common
past mistakes factors. These include:
Mistakes Made By New
• Introducing the team to the • Learning from past mistakes or Inexperienced Project
stakeholders’ agreed upon recovery • Stabilizing scope Managers
plan including the agreed upon • Rigidly enforcing the scope change

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