It isn’t always an easy road for projects. Regardless of how good the management tools are and how good the team is, sometimes projects end up classified as ‘Red’ or ‘Troubled’. This can happen for a number of reasons, including:
The business case no longer stacks up financially due to changes in the cost of materials, increased costs or simply because the driver for doing it is no longer there.
The project sponsor leaves, or a new leadership at the top of the organization downgrades or changes the direction of the project. Project resources leave or are unavailable for periods of time, for example in the case of strike action. The rest of the organization has changed around the project, so what the project is delivering is no longer a good fit for the business.
What can you do with a troubled project?
Troubled projects normally have a Red status on a Red-Yellow-Green scale of project health. This could be because the project has gone over budget, is running late, or will not deliver the products expected to the desired quality. If you recognize that your project is troubled, you have a difficult question to answer.
The temptation is to replan the project to deliver on time, or cut expenditure so you can recover some of the overspend, or bring more elements into scope to deliver what is required. None of these address the fundamental question: “Given the current situation, are we going to finish this project at all?” In other words, is there any benefit to be gained from carrying on, and if there is, how are you going to get that benefit?
Establishing the benefit
The project manager can normally replan, negotiate scope and manage the budget. The project sponsor, however, needs to be involved if the outcome of discussing the way forward for a troubled project could result in the project being brought to a close. Start with a full assessment of where the project is today, using all the data from your enterprise project management tool and anything else that will help you gain a full picture of the situation. You may find it easier to ask someone else – a colleague or an independent project auditor – to do this, as the project team could be too close to the details to be able to make an objective assessment.
When you have an objective view of the project’s situation, you have to consider what should happen next. Essentially, the options are:
- Carry on until the planned end of the project, ignoring any overspend or delay to this point but managing it more carefully from now on.
- Reduce the scope of the project and carry on, so that at least something is delivered.
- Salvage what you can from the work done so far, finishing any elements that need to be completed, then close the project.
- Close the project now.
- The route you recommend will depend on what the project has managed to achieve so far and the work required to gain control of it again. There may be some work packages that can be completed with little extra effort, and for the goodwill and morale benefits to the team, plus any benefit to the organization, it would be worth completing these.
- If the project has yet to deliver anything significant, or is a way off completing anything of benefit, it may be better to cut your losses and close the project down now.
Getting a project sponsor to close a project
After your assessment, you will probably have a pretty good idea of what the most appropriate next steps are, and in many cases that will mean closing, or drastically reducing the scope of, the project. Talking to your project sponsor about closing their project can be difficult. There may be internal politics that mean it is not a good career move for the sponsor to be seen as having ‘failed’ in this way. They may direct the blame squarely at the project team, and the project manager will have to deflect or accept this. They may be reluctant to ‘waste’ the money that has already been spent.
However, it might be an easier discussion than you were expecting, especially if it is very clear that the deliverables expected from the project can no longer be achieved. Your objective assessment of the project becomes an important tool to convince the project sponsor of the way forward, but ultimately it is their decision.
Not all troubled projects will need to be closed, but all troubled projects need an assessment of whether they should be closed. Only by understanding what you have to gain from continuing will you be able to decide whether it is worth doing so. Get a training in Project Management at Ecoways Trainings
