No matter how much you minimise the chance of failure, it is inevitable that complex projects eventually fail. If you had the foresight to plan the failure, whilst having a clear advantage over those that don't, chances are you will have to recover at some stage. No matter what the indicators of failure are (either time, budget, scope, or any combination of these), or the construct of the project (Agile, Time and Material, Fixed Fee) - there are several mandatory steps and conditions to ensure any recovery is successful in getting the project back on track.
Trust
Without trust, there is no chance of any meaningful recovery. Often, we find ourselves in the middle of a real-life prisoner's dilemma - each party knows that the potential benefit of collaboration outweighs adversarial behaviour on the mid to long term, yet neither party trusts the other not to deceive for short term gain. If this sounds serious, that would be an understatement. it is likely that distrust and lack of openness got the project this far of course - it is a fallacy to think that the same will get it back on track.
The first thing that needs to happen is complete transparency - not for the sake of pointing fingers, but to establish what the true is. An independent audit is essential as it can bring both parties together, as the auditor has no vested interest in anything other than providing the baseline from which the project can recover. It is important that the auditor is acknowledged by all parties as fully independent (contact us if you are in need of a project audit).
Common ground
The search for common ground seems like mission impossible when the stakes are high, and the emotions run deep. yet there is significant common ground to build on. A successful project - one that allows the benefits to be realised for the customer and can serve as a reference point for the partner, is rarely out of reach. It is good to note that in case of a failed project, nobody wins. If you were to draw a Venn diagram, this would the centre point. Next is to see what more fits in the common ground area of the Venn diagram - this is where give-and-take come into play. Start with the iron triangle (scope, time, budget) - establish ideal, negotiable and non-negotiable elements of the iron triangle. Find what can be negotiated at each side (note, for each negotiable concession on one side, there is a negotiable concession on the other). Third - look at trade-offs outside of the project - i.e. a partner concession on the project backed by a customer concession for marketing efforts).
The worst possible outcome is when agreement on common ground cannot be reached. A good indication that your project is headed this way, is when the lawyers are going with a fine-tooth comb through all the contracts. Nobody wins in this situation (unless you are a lawyer), and it should be prevented. If there is common ground in the "true north" of the project, there is opportunity to see it through.
A new baseline
Once new common ground has been established through negotiations and trade-offs, a new baseline is created. This is a rigorous break with the past. All parties agree to look forward, and not refer to grievances prior to the new baseline. This new baseline will have a different commercial model - as well as a different scope, time and budget constraints. The only thing that binds the new baseline and the original baseline is the "true north" - the benefits that can be realised upon completing this project.
Clean slate and entropy
When you embark on the newly baselined project, you have a clear separation from the past. However, it is essential to take lessons from the past and set up a new performance measuring system in the project. Arm yourself against surprises with total transparency - from weekly reports, to periodic independent audits. When you can start with a clean slate, you must make effort to keep it clean. In any system, without the introduction of additional energy, entropy will increase - in any project where insufficient attention is given to maintaining project discipline, a state of disorder is inevitable. Whether you continue with the relationship, or a new implementation partner is found, it is not realistic to expect different outcomes if the same process is followed.
Recovery actions
Prevention is better than the cure - still, it is inevitable that complex projects do hit a point where recovery is needed - budget is depleting faster than expected, scope is not delivered against expectation, or deadlines are missed. Here is a summary of actions that can be taken:
1. Establish if there is a common understanding of the need for recovery - it is impossible to recover a project when not all parties agree that something needs to be recovered (you don't have to agree yet on the details of the recovery, just that something needs to change)
2. Establish one objective truth - and have an independent assessor establish this for you. It is not with the objective to hit each other with accusations, merely a point of reflection on where we are.
3. Be self-critical - Ask yourself: "what could I have done better to prevent this situation?" To prevent the stale mate of the prisoner's dilemma, it is helpful that each party first debriefs what they could have done better before accusing the other party of the same. It also safeguards for the trap of expecting a different outcome when you take the same course of action. This requires a great deal of trust and is independently mediated.
4. Establish common ground - Find the things both parties agree on and work from there. Enlarge the common ground with trade-offs.
5. Verify the project benefits - Are the projected benefits still achieved? If so, the business case only needs to be adjusted for cost and time - but if they are changed, the business case will need to be recalculated to establish appropriate budget constraints.
6. Set a new baseline and move on from there - Once the new baseline is set, what happened before the baseline is no longer a topic of discussion (any commercial ramifications must have been resolved in the trade-off process and must be reflected in the new baseline).
7. Measure and report often to keep the slate clean - when you can re-baseline the project, it is essential not to fall into the same traps as before. Transparency comes with timely and accurate reporting. A periodic independent audit will maintain the transparency.
If you find the process gets stuck in points 1 through 5, then recovery is not an option. This is where a commercially viable exit of the project will be negotiated. As this is not a process that benefits any party. However, if you successfully navigated through points 1 through 5, but fail to follow through on points 6 and 7, chances are high you will need to revisit the recovery scenario again before the end of the project. A second recovery usually does not bode well towards mutual trust. Aurelian Group can assist in all seven points outlined above.
Originally posted: 28 August 2017