In the course of my career I have been involved in many projects, both big and small. I have filled in several roles, both as a project team member, as a project manager and as a project owner, for big corporations, small companies and startups. Over time I have learned to understand the risks that a few bad decisions may imply for the outcome of such projects and even companies, maybe to the point of breaking them.

1.  The project has no purpose

It is astonishing how many projects get started without having any logical connection neither to the innovation strategy of the company nor to a real market need. These projects may start small, but soon enough they may grow out of control requiring an increasing amount of resources. Worse, as the lack of strategic alignment becomes increasingly evident, more and more layers in the organization will get trapped in endless rounds of discussions about what to do with such a mess. Eventually these projects may become a white elephant. These are projects that everybody in private recognizes they never should have started, but that have engulfed so many resources and put so many careers on the line that nobody dares to kill them. At the end, the project will be terminated or the whole mess will be spun off into a new company and sold or buried in silence.

CEOs at big or small companies alike shall be very clear about which kind of projects that can be started and which ones that can’t. When ideas for projects get presented, they should pass the value proposition test. If they don’t, the project shouldn’t get neither resources nor budget to proceed further. It is also highly advisable that upper management undertakes a project portfolio review at least two times a year. Its aim is to reassess the purpose of the ongoing projects and their business case or strategic profile. The management will then have to choose which of them that will go on as planned, which  ones that should get less or more resources  and which ones that shall be terminated.

2.  The project team is not fit for the task, nor are the decision makers

A source of project failure that can be easily avoided is the composition of the project team and the amount of time the members of the team are allowed to work there. Specially when it comes to innovation or transformation projects, essential issues like the quality of the team members and their allocated time can be grossly overlooked. This happens when a project must start, but the resources or budget are neither assigned nor available yet. In a rush, people assigned to the project may lack the necessary skills or experience. In addition, it is also typical that not everyone in the team is allowed by their bosses to work full time at it. Time allocations as low as 20 percent are common. The combination of these two factors can make it almost impossible for the team to keep up with the dynamics of the project.

This applies also to the governance structure of the project. I have witnessed decision makers at steering committee level that have come to GO / NO GO decision points without having taken the time to read the underlying material. In some occasions they even lacked enough background or experience in the field to understand the complexities of the problems to be discussed. The result are long discussions, endless explanations on obvious issues, several additional rounds of meetings and severe project delays.

CEOs and executives should not tolerate  any project, or even company startups, to initiate activities without having the right team and governance structure on place. In addition, team resources should dedicate at least 60% of their time to the project to ensure their loyalty to the project and to the project manager. Ideally, their bonus should be linked to their performance as a team member.

3.  The governance structure is too simple or too complicated

The governance structure of the project should be adapted to the importance, time frame and resources assigned to it. Some projects are so strategical for the future of the company that have to be strongly supervised at the highest corporate level. Other projects should be reviewed just at critical decision points. One size doesn’t fit all and the company governance policy should be shaped accordingly. Otherwise long cues at decision points will mount for all projects, irrespectively of their size and importance, and delays will rapidly grow.

Finally, it is worth mentioning that more governance doesn’t necessarily mean better governance. Often, complex projects don’t develop as planned and decision makers don’t know exactly what to do. It is tempting then to include a new layer of governance, for example an «operative steering group» in addition to the existing one. That is usually a big mistake because new layers of bureaucracy exponentially increase the number of meetings, conversations and consultations in every decision making process of the project, dramatically slowing down its pace. CEOs and executives shall bear this risk in mind and ensure that the project gets assigned an operative governance from the start. Otherwise, the question arises on whether the project should indeed start at all.

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