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A how-to guide to successful large-scale transformation programmes
12/10/23
Marc Lahmann
Partner, Strategy & Transformation
PwC Switzerland
Adrian Stierli
Senior Manager, Strategy & Transformation
PwC Switzerland
In this post we share a few tips from our practice on how to prevent expensive, large-scale transformation projects from failing ‒ and how to rescue them if they threaten to veer off track.
PwC’s Global Programme Management Survey found that half of all projects fail or exceed their budget. Sobering, isn’t it? But hardly surprising given that the same survey revealed that 71% of companies have projects not driven by strategy. Here are some prominent (and in some cases spectacular) examples:
Having examined the root causes of failures like this, we at PwC have identified five influencing forces. These five forces don’t exist in isolation. It’s crucial to understand and manage the way their dynamics are reinforced to put a project in jeopardy.
- Lack of methods
Project managers often don’t follow a standard approach or project management methodology to identify the symptoms and risks that can lead to project failure. Often there’s no clear sequence of identification, analysis, responses, and monitoring. - Unknown processes, products and technology
Technology is certainly a factor in project success. But our research shows that even in IT and technology-related projects, the main reasons are linked to processes and people. - Complexity
A major challenge is solving complex emergent problems without having proven methods. Understanding the consequences of project complexity means assessing the accompanying organisation- and technology-related factors on an ongoing basis. - Uncertainty
The inevitable negative consequence of project complexity is uncertainty around anything from project cost and time to scope and quality. Given the interdependencies, uncertainty can infect the entire project system. - Human behaviour and leadership
Most root causes of project failure are related to human interaction. Project managers actively influence the probability of success, even if they do so unintentionally.
How can you create the foundation for successful large-scale transformations?
In our experience, it’s crucial to have a proper setup and room for flexibility, especially when it comes to complex transformation initiatives in an environment of change.
- Systematically determine symptoms of failure based on the five forces
- Identify the main root causes and identify interdependencies with the other forces
- Analyse the impact of the root causes and build scenarios
- Define remediation actions to address the root causes based on the established scenarios
- Implement remediation actions to manage the five forces proactively
- Measure and control expected outcomes on an ongoing basis
To increase the chance of transformation success it’s important to achieve maximum transparency. This means adopting a layered approach, starting at the project and work-stream level and moving through to project management functions towards an independent external view.
«Unfortunately, today’s business environment is characterised by an increased necessity for change and an ever greater volume of resulting programmes and projects. Transformation initiatives have become larger and more complex, and investment volumes are increasingly continuously. However, success rates have not increased correspondingly; on the contrary, they are even declining.»
My project is in trouble. What now?
The first question to ask is whether it’s really in trouble, or whether it’s simply a sticky phase. Sometimes trouble can arise spontaneously. But in many cases it emerges slowly. If you’ve understood the five forces and have been keeping an eye on expected outcomes, it’ll be easier to discern whether the project really is in trouble.
The success and failure of projects have traditionally been measured in terms of “the iron triangle”: budget, schedule and scope. But in today’s environment you need to take a broader view that also considers project value and the realisation of business benefits, the management of stakeholder expectations, and an understanding of the perception stakeholders have of project success and organisational readiness to enable acceptance.
Whatever the case, rescuing a project requires an experienced team willing to react quickly, and leadership prepared to make decisions. Avoid taking action for action’s sake, treating the situation as a fire drill or only focusing on the superficial symptoms to the exclusion of the real underlying issues. What you need is a structured approach, starting with stabilising the project on the basis of the visible symptoms, and proceeding to do an in-depth root cause analysis as the basis for defining a recovery plan. Here are some key steps to take:
- Assess superficial symptoms: When the project is in trouble, you need to take quick action to escalate the issue and decide whether to jump-start the recovery process or abandon the project.
- Report on trouble: Alert your stakeholders to the issue and be transparent about the challenges. Rather than focusing on the “who” and “why”, keep to the facts and concentrate on the current situation and possible outcomes.
- Identify and evaluate superficial symptoms: At this point you should summarise the current state, the issue at hand, the overall health of the project, key vital signs, the maximum time for survival in the current state, and dependencies.
- Stabilise the situation: Stabilise the project so that it can continue to progress as you do an in-depth root cause analysis. This is the critical first step towards recovery.
- Address fundamental root causes: Address issues that aren’t visible at first sight but which underlie the problems facing the project. Here it’s useful to do a self-assessment, but also to have the health of the project checked by an outside party.
- Define and understand the trouble: Start by defining a problem statement. Bring large amounts of data together on a single page and then break the problem down into its component parts, which you then prioritise.
- Map all symptoms and analyse the main root causes: On the basis of your problem statement, gather data to summarise your root cause analysis and define actionable recommendations.
- Define and implement a recovery plan: The first step is to review the original business case and evaluate whether the reasons for the project and its objectives are still relevant.
- Measure, manage and control: Closely monitoring the root causes you’ve identified will also help you prevent other projects from being affected by the same root causes. Once you’ve thought this through you can initiate a sustainable rescue process based on a transparent and approved project recovery plan.
How do we stay out of trouble?
The success of a programme or project depends on how project management, project teams and sponsors manage problematic project phases by focusing on the fundamental root causes rather than superficial symptoms. To enable this to happen it’s helpful to put clear recovery governance in place. This includes defining a recovery sponsor and a dedicated project rescue team. Continuous project health checks will enable you to identify trouble at all stages within the life cycle and keep projects on track.
Summary
Given the complexity and pressure of large-scale transformation projects, it’s no wonder many of them get into trouble. By understanding and managing a small number of common root causes and how these forces interact dynamically, you can prevent trouble in the first place or move effectively to rescue the project once trouble strikes.
PMI Global Summit 2023, Atlanta, Georgia, USA
At the Global Summit 2023 Marc Lahmann and Adrian Stierli spoke on the topic of “Are large-scale transformation initiatives doomed by default?”. The session handout is now available below.
2 http://www.newstatesman.com/business/2013/09/curious-case-berlins-brandenburg-airport
3 https://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn
4 http://business.financialpost.com/news/transportation/putting-a-price-on-volkswagens-emission-fraud-mess-its-going-to-cost-them-billions
5 http://www.computerworld.com/article/2493041/it-careers/air-force-scraps-massive-erp-project-after-racking-up--1b-in-costs.html
6 http://www.wired.com/2015/05/los-angeles-edtech/
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Contact us
Adrian Stierli
Senior Manager, Strategy & Transformation, PwC Switzerland
Tel: +41 58 792 21 69