Dear Ammar,
Almost every single project attempted by my team ends up late. I work in a resource intensive industry where my assets are my resources, and any delay in a project not only hurts my relationship with the client, but also hurts my bottom line. Last quarter, we had six projects lined up for delivery. Of them, one was completed, two are in progress, and the other three have not even been started yet. Why are projects always late?
O.S.
Dear O.,
This is the million dollar question right their. Actually, given how much is lost on project delays each year, it might even be worth a billion at least.
There are mainly three organizational level root causes that lead to three project level problems which subsequently lead to project delays. The organizational level problems are: misconceptions about the cost of delay, mistrust, and lack of early or on time completion project team incentives.
When it comes to projects, most do not see the actual cost associated with delays of project completion by not taking into consideration loss of revenue, market opportunity, and image. For example, a client of mine once commented on the importance of finishing on time for their well drilling project. His point was “whether we finish this year or next year, the oil will still be there, so why the rush? Given the amount of money we will make long term from the well, what difference does the cost of another six months make?” This reflects the attitude in general that people have towards projects. As long as there are no direct financial penalties, then duration is not an issue. However, every day of delay to putting your product in the market means another day of lost revenues and higher risk of losing edge or leadership to competition. Some companies started to take this into consideration. At the project’s outset, they calculate a cost per day of delay based on lost revenues and opportunity. The numbers are usually much higher than the direct cost of the delay. Many project managers report that this number has a sobering effect on both management and team members and they seem to take delays more seriously.
Another reason is the lack of trust between team members and management. Management does not trust the estimates of team members, neither do team members trust the deadlines of management, so the commitment of both to the project becomes shaky. Consequently, management does not give the team members the support they need to do their work, neither do team member show commitment to the deadlines imposed by management.
The third reason for delays in projects is the lack of clear incentives for finishing on time or early. To the opposite, most managers penalize people who finish early by either giving them more work, or cutting their future estimates as they use take early completion as a sign that the original estimates made by team members were too high.
The above three problems are at the organizational level and they subsequently trickle down to form three further problems at the project level leading to project delays. Eli Goldratt, highlighted these three problems in his 1997 book called “ The Critical Chain.” These are the student syndrome, multitasking, and dependencies.
The student syndrome means that people tend to, due to procrastination, delay their work until the last minute, and usually that leads to delay. It is called by this name because of its resemblance to the behavior of many students who delay studying for the exam until the last minute.
The second reason, multitasking, means that team members do not focus on the project task at hand, but work instead on several other tasks simultaneously, losing focus and time by shifting from one task to another.
The last of the three, the dependencies problem, points to the sequential nature of project activities, leading to a domino effect where a delay in an earlier task delays a later task without ability to recover. The reason for no chance recovery is that team members are not willing to admit finishing tasks early for fear of losing management trust and of future management pressures to reduce their duration estimates in the future. So, delays accumulate while savings are wasted. Under such circumstances, finishing on time becomes almost impossible.
To fix this problem, start working with management to eliminate the organizational level causes of the problem: make it an organizational practice to calculate and communicate the real cost of every day of delay. Then, create an incentive program that shares the rewards of early completion with the team members. Finally, build a trusting relationship between management and team members by eliminating mistrusting behavior like inflating estimates and trying to haggle with team members on activities duration, or penalizing people for finishing early.
As you can see from the above, this is a problem that is deeply rooted in the organizational culture, and it requires management level intervention to solve it at the organizational level.
Good luck,
Ammar