How can I minimise risk of project failure?

By Allan Watton on

project riskHigh failure rates are common in most complex projects/service delivery relationships. Some research puts failure rates as high as 87% and as ‘low’ as 56%. With great spend, comes great responsibility. With so many interconnected activities to monitor and support, the inherent risks can be great. We look at five steps that can help you minimise risk of project failure:

  1. Know your ‘now’
  2. Identify your ‘future state’
  3. Utilise your supplier’s expertise
  4. Construct a clear contract to drive ‘enabling behaviours’
  5. Establish fit-for-purpose Governance.

5 Steps to minimise risk of project failure

  1. Know your ‘now’ – the As Is

The challenges you face that have brought to the fore the need for change must be clearly and quantitively identified and documented. What are the problems, what are they costing you (include financial, time and reputational costs), why a change would be so important, and to whom.

Utilise input from all relevant stakeholders to ensure that you fully appreciate the weaknesses you are keen to strengthen. The ‘pain-points’ identified here can be used as your ongoing motivation to drive the project forward and the reasons you return to, should questions be raised during the project about its viability and necessity.

It is equally important to document the entire work process that surrounds all areas you have determined need to be changed. How you are working now, the technologies you are using, the processes you are following are all vital information that any strategic supplier you collaborate with, to design and implement the new vision, will need to know.

  1. Identify your ‘future state’ – the To Be

Without a destination you’ll never know that you’ve arrived. Your determination of ‘what good looks like’ will guide the development of a ‘future state’ outcome that your collaborative efforts with your supplier will look to achieve. This should be quantified and as detailed as practically possible, as the greater the clarity with which you are able to determine this future state, the greater your certainty can be that you have arrived at it once your milestones have been achieved. Also, knowing your destination means understanding how close or distant you are from it throughout the project enabling you to more effectively manage or drive the efforts of your supplier.

  1. Fully utilise your supplier’s expertise

Understanding, with clarity, where you are now and where you wish to be is an exercise in determining your ‘what’ and your ‘why’ – what is your challenge, what is your objective and why do you feel a transition might be worth the effort and cost?

Be careful to stay clear of answering the ‘how’ in any detail, as this is for your strategic supplier to determine/propose. It is, after all, what they are experts at. Initial questions on this can be asked in pre-contractual due diligence where assumptions can be tested and expert guidance offered.

This then continues on into the post-contractual due diligence stage. The more information you can share with your suppliers about the ‘what’ and ‘why’ the greater their opportunity to help develop a ‘how’ that achieves all your goals with the least amount of scope creep.

  1. Construct a clear contract to drive ‘enabling behaviours’

Start at the end. The very best contracts, in our experience, are reverse engineered from the outcomes you are looking to achieve. Through the detail and effectiveness of your efforts in 1, 2 and 3 above, you will have gathered enough information to determine your destination with some accuracy, and with the guidance of your supplier through your due diligence exercise you will understand far more about the route to this destination, its pitfalls and opportunities.

A contract that acknowledges all of this, alongside sensible measures for maintaining productivity, quality levels and mechanisms for drawing parties back on track when necessary (in a way that strengthens commercial trust rather than simply cracking the whip), is a contract that can sustain a relationship and see parties through to the end of the road.

Built within this contract, should also be a requirement for regular review and refine sessions where the service and supporting documentation can be adapted to remain aligned to the real-world challenges and changes that the relationship may face along the way.

  1. Establish fit-for-purpose Governance

With so many interconnected activities to monitor and support during complex strategic supplier projects/relationships, the inherent risk of project failure can be great. To manage risks and to resolve issues before they can have costly consequences, a robust governance structure should be implemented to allow for the effective handling and resolution of issues. Where issues arise, it needs to be clear how these should be dealt with and what process ought to be followed for escalation. If this process is unclear, a lot of issues can be left to bubble under the surface, culminating into much bigger problems later down the line.

Access More Support to minimise risk of project failure

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