We are in a situation where the activities aimed to prevent a project from going to the RED status didn’t work.
Tools, methodologies, external and internal circumstances couldn’t help a PM to spot and manage the early warnings to prevent a crisis. Let’s see how PMs can take the challenge of managing the recovery.
Firstly, we need to be really aware that each project is unique. Therefore,
- A strategy needs to be defined in order to create and a proportional and appropriate response and put it into practice;
- Any methodology, processes, and tools used to manage the project need to be adapted.
Secondly, when deciding on an appropriate response:
- review expectations and be realistic about the probability of achieving either full or partial recovery;
- accept and communicate that some things can be resolved and some cannot.
Finally, We need to understand in what kind of status/scenario the project on hold is.
How Bad is the RED Status?
Although a list of things that can go wrong with a project would be endless, the troubled projects broadly fall into two categories: those that could be rectified using a ‘soft’ recovery approach and those that require a ‘hard’ recovery.
- “Soft” de-stress and recovery: PM hasn’t been fired after the start of the crisis and is in charge of the project. In this case, the recovery does not require an independent audit and is carried on by you as PM.
- “Hard” recovery: a new PM can be hired to inherit a troubled situation in order to deal with it with a fresh mind. You may have several options to help the Company (but be aware that sensibilities are high in this scenario) and you need to show findings and independently draw a conclusion.
In other words, we can define “Hard Recovery” as the situation where some of the risks and issues emerging from the project status on hold, are not mitigable or manageable anymore with the same project governance and the vendor.
What is a likely Lifecycle of a project recovery?
In the course of my career, I have been inspired by Auditing and Consultancy companies which proposed different methodologies and approaches.
Combining this type of independent professional activities with PM methodologies I have developed a process with specific phases:
- PRP: Project Recovery Pre-Initiation
- PRA: Project Recovery Assessment
- PRSE: Project Recovery Settlement
- PRS: Project recovery SOW
- PRD: Project Recovery Delivery
Try to understand the project’s history, the environment, internal politics, original business case and expected benefits, stakeholders’ original expectations and current view of the project.
It’s a high-level view of the internal and external project background, the first opportunity to start the engagement with business and project governance.
The PRA is a combination of project audit and consultancy methodologies.
The baseline is the originally expected outputs from the project activities related to the Company’s objectives.
The depth and breadth of the Project Recovery Assessment depend on the project situation.
The approach is to highlight, and unhide every issue/ risk, to define the root causes and propose every possible prioritized remedy actions.
Project Governance assessment
- General project performances
- Project management organization
- Project board, Sponsorship, stakeholders
- Teams’ members
Financial elements assessment
- Budget vs costs analysis and CTC
Business area assessment
- Business environment
- Business case validation
Vendor area assessment
- Vendor performances assessment
- Contract assessment
Requirements for a recovery phase
- Requirements vs solution proposed
- New requirements mapping and impact analysis
Summary (findings) and Recommendations
The new requirements bring up functional and technical aspects which are related to a budget/CTC review. We can consider these main categories:
- Confirmed requirements, that is actuals and budget are confirmed;
- Emerging requirements (to achieve the recovery), in other words, something needs to be added to the budget;
- Requirements not valid anymore to be removed, which implies no actual costs and budget reduction
- Requirements not valid anymore not recoverable actual costs, likely lost but to be settled
This is the most crucial phase for the recovery: PMs findings need to be discussed and eventually accepted by the vendor, the Board and stakeholders.
Inputs/outputs for vendor settlement
We can assume that in the worst-case scenario (no settlement or settlement not fit-for-purpose) you seriously need to consider terminating the contract.
Stakeholders are now able to evaluate the results of the Vendor settlement and the PRA.
Please remember that there could be other inputs for the final decision, related to external factors such as market conditions and trends, technological innovations, legal compliance, etc.
Going for a project recovery (full or partial) is normally the input for the next phase – Project Recovery SOW (PRS).
In fact the PM will get the following elements:
- New requirements confirmed
- New expectations confirmed (time, costs, benefits expected)
- Sponsorship confirmed
- Resources and roles approved
- An adequate change management budget and activities accepted.
We can now wrap up the outputs of the previous phase in a new SOW which is the re-starting point that can drive the recovery activities unambiguously. I would like to propose the following content:
CTC will likely include both valid actuals and those not anymore in the scope (settled and not settled), and a new budget related to all the activities included in the New requirements.
This is where the delivery actually happens, following the strategy and the plan.
Some project management activities will be more stressed.
- Communications with Stakeholders and Vendor
- Planning and status updates
- Change requests process
- Change management to engage and manage engagement vs resistance
- Intermediate checks before monthly reporting in some critical areas.
A Project recovery is a challenging situation. This approach helped me to go through complex situations, gaining experience and new skills.
The PRA – Project Recovery Assessment phase can be considered an auditing and consultancy activity: using an independent approach you can analyze how critical the project is, bearing in mind that the results of your activities can be accepted and that proposals become activities. It’s a great professional responsibility. During these activities, you can gain and/or improve such skills, as:
- interpersonal and communication (both oral and written) skills,
- strategic planning ability,
- analytical skills,
- commercial awareness.
The PRSE: Project Recovery Settlement is another extraordinary phase where you need to use some skills, such as:
- Rapport Building,
- Decision Making,
- Conflict Resolution and Mediation,
- Persuasion and Influencing.
The PRS: Project recovery SOW enhances your PM skills when you have to think strategically and how to manage a WBS and a plan in a non-standard delivery.
Good Luck and take up the challenge!
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Luca Collina (BA, BSC & PM PRINCE 2 Certified) is an independent transformational consultant and PM (change management and ERP). If you are looking for a way to balance your tasks between project & change management send me a message directly to me at firstname.lastname@example.org