Projects & Investments Revisited: Are We Being Consciously Illiterate?

In my last column, we explored the separation of project success and investment success as two separate, discrete concepts that need to be thought of and managed differently. The reality for many organizations, however, is that they try to blur these concepts as one single idea under the overall heading of ‘project success’ – with the implication that the project isn’t successful if both are not achieved. What has become increasingly clear to me is that for many individuals and organizations, this obfuscation is conscious and deliberate.

In workshops I conduct with both project managers and executives, the debate that I encounter almost entirely revolves around the confusion between project and investment success, and at times a blind refusal to accept that a project is successful if the hoped-for return on investment is not realized. Often this is couched in words like “there’s no way my executive team is going to accept a project being successful and a team getting patted on the back if the payback we expect doesn’t happen.” Equally interesting is the willingness to call a project a success even when the return is realized by pure, dumb luck rather than any particular guidance or skill on the part of the project team.

What is most fascinating about all of this is that often the project managers are the ones that are most adamant about not separating these concepts, even thought it is the project managers who have the most to gain or lose by them being blurred. A culture has emerged that says that projects own the organizational consequences of success and failure, and that projects will be judged by whether or not the returns they promise actually can be realized. While this is nice in concept, it doesn’t reflect the reality of where accountability and responsibility for decision-making lies.

The choices that an organization makes about a project are significant – whether or not to do the project in the first place, whether to accept the project plan and business case, and whether or not to consciously change the organization once the results of the project are attained. Projects are a source of change, but ultimately they produce some tangible thing. This could be a new business process, a policy, a product, an information system or a new manufacturing plant. Once built, however, the project is over. While no one disagrees with the finite nature of projects, we now need to look beyond the completion of the project to determine what happens to the thing that we have just built.

Once we have completed a project, the results move to whoever has ownership or operational responsibility for the thing the project has produced. In essence, they are responsible for using the results of the project in a way that allows them to realize their goals. It is in their hands, therefore, whether or not the ultimate business results of the project can be realized. Granted, there can be extenuating circumstances here. If the project produces something that is not usable, it should be no surprise that the outcomes aren’t realized. This is, in fact, the biggest reason why we need to evaluate project success; we need to understand whether the results of the project are fit and suitable for the purpose they are intended. As well, economic considerations can have an influence on our results. If we launch a new luxury product at the start of a deep recession, it can reasonably be expected that earlier business projections are open to revision. Overall, though, how we change the organization to take advantage of having conducted a project really influences whether or not success is realized.

For most organizations, this operational ownership lives with the executive or group sponsoring the project. They are investing in the project because they want the results in order to change how their business works. For so many of us, though, what’s good for us and what we do are two very different things. We know we should diet and exercise, but pizza on the couch in front of the TV looks really good right now. Likewise, we know that we need to change if we want to get better as organizations, but change involves discomfort and pain and if we can avoid it, we will. As a result, even though we sponsored and paid for the project we may not be crazy about using the results for the purpose we intended.

Against this background, we still have the project managers resisting separation of project and investment success, and it is important to ask why this should be. Where this tendency appears most strongly is in organizations that are both strongly focussed on customer service while also being fairly hierarchical in nature. In this environment, there is a high motivation on the part of the project manager to deliver a project that will work – not just meeting the expectation, but also delivering the needs and expectations of their customer. This is not a bad thing at all, and is in fact highly desirable. It comes coupled with a structure, however, that tends to devolve accountability onto the project manager without necessarily providing the authority and responsibility necessary to deliver what is required. In other words, one where they tend to be blamed where things go wrong but not have the tools to be able to significantly change things.

In these circumstances, there tends to be an acceptance of the political reality of their role, and therefore of the fact that they will wear responsibility for both project and investment success regardless of where responsibility actually is. To an extent, the espoused organizational values even reinforce this expectation and acceptance. As a result, there is no point in separating out the concepts – it is simply an intellectual exercise that has no material impact on their existence. Even where they have no influence on the operational decisions that drive how the results of their projects are used, there is a resignation that they will be, as project managers, held accountable for these decisions. The fact that these should be separate, and that they should not be held accountable for both, is really quite irrelevant.

Moving past the immediate sadness of this state of affairs, it is more important to look at where the accountability isn’t being held – on the sponsoring executives responsible for the projects and for implementing the project results. This is the real driver, and also the real consequence – by creating an environment where blame is placed at the feet of the project manager, these executives are able to avoid having to deal with the consequence of their own decisions. They avoid needing to address the lack of willingness by themselves and their organizations to undertake the change required to deliver the expected returns. In essence, they are squandering the precious resources of the organization – it’s money, time and people – in favour of protecting their own ego, position and sense of self worth.

To deal with a problem, first we must acknowledge it. To acknowledge a problem, however, we have to be able to name it and speak about it – we need a vocabulary to address it. By separating project and investment success, we are able to place responsibility and accountability for both where they properly belong. This isn’t passing the buck by the project manager, but asking for leadership from the sponsoring executive. Organizations should expect nothing less.

 

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