Projects fail — a lot. Nearly half of all projects fail to meet time, cost and quality requirements. Eighty-four percent of projects don’t meet all success criteria and 9 in 10 projects go over budget. In fact, only 2% of organisations don’t experience any kind of project failure (Standish Group; McKinsey; PwC).
In the last 20 years, organisations – both public and private – have invested heavily in improving their capability to deliver projects. Yet project success rates have only improved by 10% or less. Having a PMO isn’t a silver bullet either – they only reduce the failure rate by 8% (PMI).
Over the same period, ‘projectisation’ has continued to gain prominence as a means of delivering core elements of business strategy.
It stands to reason then, that if you’re delivering your strategy though projects, your Project Delivery System is either a competitive constraint or a competitive advantage. And the way yours works can be a key driver of success (or not).
We view the Project Delivery System as the ecosystem in which projects, programs and portfolios are planned, executed and governed. The PDS is an organisational way of working that synthesises hard and soft factors, by including skills, culture-driven behaviours, processes, systems, governance and delivery methodologies and the assembly of these characteristics to enable ongoing outcomes.
Why should you care?
“Strategy execution is the responsibility that makes or breaks executives”Alan Branche and Sam Bodley-Scott, Implementation
There are a huge range of reasons your Project Delivery System might not be delivering the strategic outcomes you’re looking for:
- Project process or document compliance mentality.
- Over-complicating solutions and adding scope to get the ‘best’ outcome, not the right outcome.
- Incorrect application of project processes, tools, expertise and controls.
- The ‘wrong’ projects are being executed, or in the wrong sequence.
- Strategic initiatives / projects have no clear line of sight to the overall strategic goals.
- Organisation is constantly undertaking projects beyond its execution capability and failing.
- The execution / delivery methodology doesn’t align with organisational needs.
- The enabling behavioural and people capability is not defined or mature.
Poor results from a Project Delivery System are common in even the most project-focused organisations. We often describe a company’s Project Delivery System as like DNA – the unique result of the journey the firm, industry and team have undertaken.
It’s this uniqueness that results in stories like this: one organisation’s Project Delivery System demanded a Project Management Plan of around 450 pages. Preparing it consumed thousands of resource days. While the sponsor was thrilled, the project team was frustrated, and project owners confused because the project team stopped actually delivering the portfolio of projects they needed. Worse, the PMP was obsolete the moment it was complete because the firm’s Project Delivery System failed to recognise that projects are dynamic and fluid.
At the end of the day, the causes of Project Delivery System challenges vary between organisations but the outcomes are common:
- A business case for a relative simple project becoming a 100+ page document.
- Status reports claim the project is on track and performing well, but stakeholders are not happy.
- No visibility of the risks to major projects, the portfolio, or the resulting risk to the firm.
- Repeated ‘re-baselining’ and ‘re-budgeting’ of projects.
- Lots of ‘successful’ projects, say the project team, but the strategic outcome isn’t being achieved.
- Projects not delivering the project value they were expected to deliver (also known as project failure).
- Inability to harvest benefits from projects post-execution.
Lifting the focus – From ‘Projects, programs and portfolios’, to the ‘Project Delivery System’
Helmsman’s multi-year research into complex project performance, and our experience delivering Project Assurance services through our Project Performance Diagnostic means we’ve had the chance to observe the Project Delivery Systems of hundreds of organisations.
After looking at more than 1,000 projects, including up to 20 in single organisations, it became clear that each organisation’s unique Project Delivery System had an enormous impact on project performance. It was also apparent many businesses don’t consciously look at what’s not working within the system, focusing on the specific project and program challenges. Here are some of the results we saw:
- Within one firm, Helmsman identified three different Project Delivery Systems within three related business units, resulting in poor project time and budget performance, differing project and governance standards across the whole firm and limited confidence (or value) in firm-wide portfolio reporting.
- In a services firm, senior executives were unable to prioritise their project pipeline as each project’s contribution to strategy was not clear. There was also a compliance culture when it came to projects, a tendency to overcomplicate scope to get the ‘best’ outcome, and limited visibility of project-related risks.
- When reviewing the performance of a strategic technology project, we discovered that even if the project succeeded, it would not help achieve the strategic goal it was meant to realise. Further analysis revealed that the lack of an integrated project capability had stunted the organisation’s strategic growth for the previous five years.
A model for a high-performing Project Delivery System
Helmsman used this data and insight to develop a model for a high-performing Project Delivery System (PDS). Our model is founded on an outcome-orientated philosophy:
- We use a right-to-left approach that involves clearly defining what a successful outcome looks like, and build a culture on how things can be done, not 'why not'.
- We believe focusing on the outcome is key to project success. For us, your outcome is everything.
- Promotes a culture of transparency with straight-talking, can-do and broad thinking approaches defining what needs to be done to deliver the best results.
- No two situations are the same, so we don’t assume a one-size-fits-all approach.
Helmsman’s model embeds, rather than simply designs, a Project Delivery System in the organisation. Our PDS framework creates an environment in which portfolios, programs and projects can be prioritised, sequenced, designed and delivered successfully, enabling effective strategy execution and enduring changes to thinking and doing.
It does this by:
- Ensuring strategic goals executed through an integrated Program approach
- Adopting one project gating framework to define minimum standards for users
- Embedding a fit-for-purpose project control framework
- Ensuring capability is embedded in organisational operating model
Execute strategic goals through an integrated program approach
An integrated approach to align your project portfolio to strategy provides confidence the right project investments are being made. By applying integrated portfolio planning, prioritisation and governance approaches – aligned to strategic goals – the portfolio design is prioritised, sequenced and optimised. Integrated governance drives performance through data-driven decision making, dependency management, and active risk and issue resolution. An integrated approach provides the line of sight between each project’s outcomes and the overall strategic goals. Failure to do this well results in the wrong projects being executed, overinvestment in governance data gathering, and limited visibility of risk.
Most organisations believe their project portfolios are aligned to their strategy, but when probed more deeply, cracks begin to appear. For example, over the last few years there has been a significant focus on customer centricity. As a result, the number of projects to improve customer service has grown exponentially. When challenged for strategic alignment, many business cases are often intangible, providing sufficient ambiguousness for significant scope changes and limiting focused performance measures.
An example of what strategic alignment looks like:
- Strategic outcome sought: A corporate Net Promoter Score target of +5
- Problem statement: 83% of customer dissatisfaction is driven by billing issues
- Project assessment metric: This project will reduce billing issues by 30%
Adopt one project gating framework to define minimum standards for users
A consistent gating framework of minimum standards for all projects enables experience, tools and terminology to transfer across projects with a common basic understanding. All projects follow a common pathway through their lifecycle, irrespective of methodology (Agile, Prince2 etc.), with a right-to-left (end state) approach.
This makes it possible for different types of projects within a portfolio to be compared and assessed on a like-to-like basis. The Project Delivery System model defines six simple, but critical, questions that must be answered before proceeding through to the next gate.
Embed a fit-for-purpose project control framework
Applying Helmsman’s research-based complexity and controls toolkit lifts the project delivery capability of the organisation by equipping it to understand the complexity of the projects it’s undertaking and then designing fit-for-purpose controls to effectively execute on those projects. Based on benchmarks of comparable successful projects, minimum control standards are applied to increase the likelihood of project success. These controls are embedded in artefacts to entrench compliance and avoid a ‘tick and flick’ mentality.
In many organisations, project complexity – and often project controls – continue to be defined by the size of the budget or duration. While important, these aspects have little relationship to project success. As a result, the controls applied to projects may be excessive in some areas, and underweight in others. Our research found understanding and the Ambiguity, Context and Social dimensions of project controls and adjusting them to ensure that they are fit for purpose are most often underinvested critical for success.
Embed capability in the organisational operating model
Our model focuses on embedding capability to manage the Project Delivery System. We go beyond processes and methodologies by also improving individual and team capabilities, and systems. Effective delivery requires more than just a delivery methodology. Organisations need a way of working embedded within the operating model and underpinned by effective governance, right processes, enabling culture, fit-for-purpose systems and clearly defined roles and responsibilities. Insufficient focus in this area tends to result in a ‘process orientation’ or ‘compliance orientation’.
The basics of project management (schedule, budgets, methodologies, etc.) are all important and necessary – but only when they’re fit-for-purpose based on the type of projects you do and outcomes you seek.
Like to know more?
Our approach complements these elements, and for many of our clients, radically simplifies the Project Delivery System. We augment this by linking your strategic goals with the projects you’re delivering and building a framework to manage them with a pragmatic ‘outcome first’ approach, irrespective of the methodology you choose.
This may sound obvious, but too few organisations are taking this type of holistic approach. Why? Because its hard and requires great leadership and focus. But the results – competitive advantage achieved through projects that actually deliver on their objectives – are more than worth it.
Disagree with our point of view? We’d like to understand your experiences and perspectives and get your feedback.