Analyzing Red Projects: To Stop or Not to Stop
As discussed in my previous article, project recoveries are a four-step process. One must, however, determine a short-term plan for the project. It takes time to get to a resolution and it is nonsense to continue spending money on a failing project. There are two options:
1. Stop the project;
2. Slow the bleeding.
The preference is the latter. Revisit this decision, though, after the audit to ensure that the degree of the problems on the project is of the magnitude originally anticipated. If it is worse, it is possible that stopping the project, or even canceling it, is a better option.
There are three primary reasons the project should remain running:
1. Properly diagnosing a system requires that it is running. Stopping the project stops the errant behavior. It is very difficult finding problems and their root cause when they are not occurring. As with a car, the engine does not make that odd noise unless it is running.
2. Waiting until after the acceptance of the full recovery plan to implement all the changes increases the risk because there are a larger number of changes that have to happen at one time. Remedial changes can take place while still auditing and analyzing. To continue the automotive analogy, change clogged air and fuel filters. There is minimal cost and effort involved. Few, if any, people will take exception.
3. Implementing remedial fixes exercises the system in a new way. Applying new and tightening old processes will uncover other issues to address and often point to some of the problems' root causes. Replacing a dirty fuel filter may solve the problem, have no effect or point to old parts in the car that easily break.
This underscores that the first three steps of the recovery (audit, analysis and negotiation) do not necessarily happen sequentially, they may be concomitant. Simple processes and policies need to be put into place. Some of the obvious ones are:
1. Improved team communications;
2. Limited or no overtime;
3. Better change management processes;
4. Improved risk management.
To reduce the impact of the analysis time, avoid assigning "gates" to these steps. Gates (requiring one step to complete prior to starting the next) will inhibit the recovery and exacerbate the financial problems. That would add unnecessary overhead to the recovery and could jeopardize its success