Projects often go crazy and veer off track. Project managers can make project course corrections by developing a structured process that lets them assess the situation, determine whether recovery is possible, and turn around the project.

Project recovery: A four-part series

This is the first part in a series of four articles dealing with derailed projects. Part II of the series will focus on the development of the assessment plan and strategies for conducting the assessment of the project. Part III will look at developing and executing a recovery plan. In Part IV, the author will look at strategies for keeping projects out of trouble in the first place.

This guide for project managers is designed to help with the assessment and recovery of a troubled project. Here are key concepts and terms you should know as we set the stage for this series on project recovery strategies.

Key concepts
The first thing we need to do is to clarify key terms:

  • Assessment: The structured review of the project and project plans. It is similar to what the Project Management Institute (PMI) calls an audit.
  • Recovery: An attempt to rescue something useful from the project. The best-case scenario is to recover the entire project, possibly with a scheduling delay. But when saving the entire project isn’t possible, project managers need to focus on salvaging anything that will result in continued business and financial benefit. In other words, we need to prevent total project failure.
  • Troubled project: The meaning of a troubled project is relative, because it depends on the situation. In some cases, no slippage at all is allowable in the schedule, so there is little tolerance for schedule variance. In cases of internal projects, more schedule tolerance may be acceptable. It is difficult to come up with a comprehensive definition. The situation will escalate to troubled status when one of the major stakeholders (customer, supplier, sponsor, etc.) can no longer tolerate the situation—in other words, when the variance trends have exceeded acceptable levels of tolerance and the project is heading for failure.
  • Rapid: Rapid means that time is critical. The causes of the project’s trouble must be determined as quickly as possible. The consequences of total failure may be very expensive. The customer’s business and the relationship with the customer are at risk. We need to conduct the assessment and recovery process as quickly as possible in relationship to the project demographics. Obviously, smaller projects take less time to assess and recover, if possible, than do larger, more complex ones.

Warning signs
Here are examples of symptoms that contribute to the need for rapid assessment and rescue:

  • No one on the project knows when the project will finish.
  • The project’s deliverables are loaded with errors and defects.
  • Team members are working involuntary excessive overtime.
  • Management is unable to forecast a project completion date or estimate to completion.
  • Requirements keep changing.
  • Goals and constraints are inconsistent.
  • Dysfunctional communication exists.
  • The customer has lost confidence that the project team will ever deliver the promised deliverables.
  • The morale of the project team is very low.
  • The team is experiencing irresolvable conflicts.
  • Interpersonal relations between project team members are highly strained.
  • Management is considering the cancellation of the project.
  • The customer is threatening to take legal action against the performing organization.
  • Many work packages have been 90 percent complete for what seems like forever.

In some cases, termination is the best option
Rescuing a project is not always possible or even desirable. One of the major objectives of the assessment process is to determine whether a recovery is possible or not. The following are examples of situations where recovery is not possible or desirable. In such cases, we should terminate the project.

  • We cannot achieve the business benefits associated with the project.
  • The political environment within the performing organization is no longer supportive.
  • The sponsor has dropped the project and no replacement is apparent.
  • The business needs that the project is trying to satisfy are no longer valid.
  • Major technological changes have occurred that render the proposed deliverable obsolete.
  • Litigation is in process.
  • Market conditions have changed.

A spectrum of variances
Project managers know that variances are likely to occur on any project. In fact, a project manager should be very concerned if there are no schedule or cost variances. Zero variances exist only in a fantasy world. The question is not whether we have variances or not; the question is whether these variances are acceptable or not.

A project with acceptable variances is within the zone of normal project management. In this zone, normal project management practices are applied, for example, fast tracking, crashing, and working overtime. On the other hand, if the variances are just too extreme, then the project is a strong candidate for termination, not recovery. Our main objective in the assessment phase is to determine whether the project is eligible for recovery.

The assessment and recovery process
The assessment and recovery process consists of four phases (see Figure A):

  1. Recognition of symptoms
  2. Assessment
  3. Recovery
  4. Signs of recovery

Figure A
The assessment and recovery process

The recognition phase is when a major stakeholder recognizes that the project is in trouble and officially requests support with an engagement letter.

The main objectives of the assessment phase are to determine the status of the project and to recommend whether the project is a good candidate for recovery or cancellation. The assessor should identify the changes required in order to regain control of the project. Changes may be required in people, product, process, or tools. A troubled project is usually associated with a lack or failure of a project management information system that provides the basis for assessing the status of the project with respect to time, cost, and quality performance objectives. It also provides intelligence on how the project contributes to the organization’s strategy and success. The assessor should be able to determine the status of each work package whether it is complete or not. The assessor should be able to identify all open work packages, repair work needed, problem closure, issues for resolving, and other outstanding items. During the assessment phase, some of the key areas that the assessment team needs to evaluate are:

  • Business case
  • Project charter
  • Organizational support
  • WBS
  • Issues
  • Risks
  • Defects
  • Resources
  • Budget
  • Schedule
  • Project management information system and control processes

The main objectives of the recovery phase are to develop a recovery plan and to implement this plan. The focus of the recovery is on:

  • Resolving project issues
  • Producing an achievable schedule
  • Rebuilding the project team
  • Negotiating and updating project baselines
  • Reestablishing stakeholder confidence in the project

Guidelines for addressing troubled projects
Here are some general, practical guidelines you can use to address troubled projects:

  • Realize that the project assessment and recovery process is not a witch-hunt.
  • Limit the discussions and findings to project issues, not what happened or by whom.
  • Activities associated with the process should be highly sensitive to human emotions and reactions.
  • There are no ready-made formulas or recipes.
  • There is no magic or silver bullet solution.
  • Recovery should be accomplished in the context of the project objectives.
  • Any work with a status of done must be done; beware of the 90 percent complete syndrome.
  • Be realistic; accept what can be fixed and what cannot be fixed.
  • Be open-minded and ready to change.

Troubled projects frequently result from the failure to follow project management fundamentals. Fortunately, troubled projects exhibit certain warning signs. A project is in trouble when variances are beyond the acceptable tolerances and less than extreme values. We’ve introduced a structured methodology to assess and recover troubled projects. This methodology consists of three high-level phases: recognition, assessment, and recovery. In the next article in this series, we will discuss the assessment process in detail.