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The Need for Project

Management

Metrics $($G$)$

NEED TO CANCEL PROJECTS

Even with the use of value metrics, the company realized that not many projects

were being canceled. Everyone knew that creating products within time and cost

constraints would be difficult. Although the company was good at linking its innovation projects to a business strategy, it was poor at cost estimating. Even when

a project was selected and properly linked to a business strategy, there was still a

fuzzy front end where detailed requirements were almost impossible to develop.

On innovation projects, it was common practice to use $$rolling$-$wave planning,$$

where more detail was added to the requirements as the work progressed. Simply

stated, if you can lay out a detailed plan for innovation, then you do not have an

innovation project.

Estimating the time and especially the cost of an innovation breakthrough

was almost impossible. Effective innovation leaders are those who have a fervent

belief in the project, refuse to let the project die, and often use faulty rationalizations as to why the project should continue regardless of what the value metric

measurement shows. Some people believe that effective innovation leaders are

those who see a future that does not exist yet for what they are developing. This

belief generates a reluctance to terminate projects.

The company needed to do a much better job of pulling the plug on projects.

Every project seemed to develop a life of its own, and no one had the heart to cancel them, regardless of the value metric measurement results. No one seemed to

$348$ Project Management Case Studies

have the authority to cancel the projects. Once a project was terminated, the company would ask, $$Why didn$$t we do this earlier?$$ or $$Why did we approve this

project in the first place?$$ No best practices or lesson learned were ever captured

related to mechanisms for canceling projects.

Al Grey met with the metric management team again and asked them for their

assistance.

We need to do a better job on canceling projects. I know this is not the reason

why your team was created, but I value your input. Perhaps metrics management

in another form is the solution, but I am not sure. I have looked at three mechanisms for canceling projects and perhaps you can give me your opinion of the

advantages and disadvantages of each method.

First, our senior people seem to get involved in these projects at a point where

they can be the least helpful. They seem to avoid identification with any project

that might damage their career. Their involvement appears only after they have

someone to blame other than themselves if the project is terminated. So$,$ in the

first method, we could assign a project sponsor from the senior levels of management to each of these innovation projects, and the sponsor must then be involved

all the way through.

The second method involves lower and middle management. Right now,

lower and middle management are backed into a corner because they may be

involved in some of the projects yet have no decision$-$making authority for

canceling them. To make matters worse, the people on project teams often

are not honest with lower and middle management regarding the real status of

the projects. Now senior management begins to wonder if there is frank disclosure coming up to their levels. Perhaps lower and middle management should

serve as project sponsors and be actively involved in innovation projects from

cradle to grave.

Although project sponsorship seems like the right idea, I have read about

some of the risks in assigning sponsors. The risks include:

$$ Seeing what they want to see

$$ Refusing to accept or admit defeat or failure

$$ Viewing bad news as a personal failure

$$ Fear of exposing mistakes to others

$$ Viewing failure as a sign of weakness

$$ Viewing failure as damage to one$$s reputation

$$ Viewing failure as damage to one$$s career

As a result, sponsors may not want to cancel projects. Therefore, perhaps

we should assign an exit champion. The exit champion would be someone from

the executive levels of management and a person who has no vested interest in

the workings of the project. The exit champion will determine periodically if

the project should continue. If the exit champion determines that cancellation is

The Need for Project Management Metrics $($G$)349$

the best option, then he or she will present the findings to the executive steering

committee. The executive steering committee will have the authority to override

the findings of the project sponsor in favor of the findings of the exit champion.

QUESTIONS

$1.$ What are the advantages and disadvantages of each approach?

$2.$ Which approach would you pick?

$3.$ Can the exit champion use a different criterion, such as looking only at return on

investment?$347$

The Need for Project

Management

Metrics $($G$)$

NEED TO CANCEL PROJECTS

Even with the use of value metrics, the company realized that not many projects

were being canceled. Everyone knew that creating produc