How many projects fail and had to be rescued by cleverly engineered ‘garbage excuses’?

In my years as a project manager and an insurance manager, more than 90% of projects fail to be completed as expected especially when considering the originally agreed period and to the specified quality of performance.

Project managers often manage to get away from blame by ‘thick technical report’ which shift any blame to act of god incidence, unpredictable weather condition, bureaucratic approving authorities, unforeseen escalation of prices, unexpected soil condition and whatever else excuses which sound rational to the higher management.

There is no doubt that failure is inherent to a project and failure is the name of the game.  However, we have to define what do we mean by failure and to understand failure from other team members involve in the project. What is common is my experience are things which are not given serious attention during the initial project approval process.

• A beautifully designed office building turn out to be difficult and costly to maintain.
• A power generation project which was completed in time, cannot be operated as expected when the transmission line collapse during construction.
• The civil engineering works was completed but the mechanical equipment fail to arrive after a major equipment suffered an ‘uninsurable damage’ during transportation.
• he local authority refuse to issue ‘work permit’ following strong objection from local residences.

As project managers, we are told to focus our attention on identifying and managing the risks to make sure that the project is completed with little surprises to the Owner.

One reason could be that the list of risks identified and expectation on how deal with risks, is bigger than our ability to manage them. I think projects often fail due to five considerations and lessons which we are not willing to admit:

1. The project deliverable, as promised to the Owner is not realistic.

• Being optimistic is being a smart Project Manager. Project risks have been identified as per official company guideline, ISO standard and international best practices – “ What more do I have to do!”.

2. The project deliverable is possible, but the timing and resource objectives are insufficient for delivery.

• Planning for resource and risk identifications as if the world of today will remain as it is five years from now as it was five years ago. The current global financial crisis, middle east growing political instability and magnitude of natural disaster should make us ponder a little bit and start thinking outside the norm of normal.

3. The project is poorly planned, chaotic, and badly managed.

• Thinking that with years of experience that you have gained over the years, what can possibly go wrong. All project manager must read the book ‘Good to Great’ follow by the book ‘The Black Swan’. There is much all of us need to learn about value of humility and the power of randomness.

4. The project paid a lot of money to Insurer but not read the fine print of insurance policy.

• Thinking that insurance is the least important part of the project, the project is manage for nothing going wrong . While the premium may be only 0.5% of project cost, any misunderstand of what risk is covered and cannot be covered by insurance, will likely to cause major headache among the Owner, Engineer and Contractors when a remote chance of big accidental loss suddenly become real.

5. The project management team is very confident that everything have been planed for.

• Not listening to Nassim Nicholas Taleb and managing project with the assumption. Assume that risks can be qualitatively and quantitatively measured , identified risks will comply with a bell curve distribution pattern and risks can be managed using Pareto 80:20 rules.

Because risk management is about planning with documented data and information, it reduces third possibility bad and chaotic management of project.

Nonetheless, risk management cannot run away from the planning rule of ‘garbage in garbage out’. Realistic risk identification and prioritization is what separate a ‘wise and critical’ project manager to a ‘smart and optimistic’ project manager.