How to Spot a Failing Project Before it Becomes a Famous Failure

 

I heard on the news last week that a credit union in our area had recently failed and their assets were purchased by some financial institution in Virginia. Over the weekend I stumbled upon a few warning signs that your financial institution might be in trouble. Of course there are a number of "financial" indicators, but I thought some of these might be a little more reliable:

1. They have an incessant need to lower expenses by chaining pens to the desk
2. There are no withdrawal slips available anywhere, but there are plenty of deposit slips
3. The branch manager is wearing a tie that has another bank's logo on it
4. All the teller lanes are closed but one
5. You're charged a $12 fee to make a deposit, a $9 fee to open their door, and a $27 fee to breath their oxygen for three minutes
6. When you cash your check, they give you Euros
7. There's an auction going on in the back parking lot—lots of desks and filing cabinets
8. The FDIC answers the customer service phone line
9. The Commercial Loan department wants to know how much you can loan THEM
10. The bank's vault door is open, but the front door is still locked at 9:13 am

Although not as entertaining, there are early warning signs for projects that are in trouble, if you're watching. The earliest signs are hard to measure, but easy to recognize if you are paying attention:

1. Lack of interest: Whether it's a lack of interest within the project team or among the project stakeholders, it's often demonstrated by people not showing up for meetings, a lack of active participation and feedback, or a poorly energized user base. This is an early warning sign of a project in trouble.
2. Poor communication: If nobody is communicating, including stakeholders, team members and end users, there could be a problem.
3. Lack of velocity: Projects should always be moving forward. The best way to keep a good velocity is to divide your project into small deliverables at frequent intervals. If the project isn't moving forward, it's likely in trouble.
4. A "no-bad-news" environment: Nobody likes to be the bearer of bad news, but sometimes organizations need to face the reality of negative news. This includes project team members who don't want to be the messenger and business leaders who tend to shoot said messenger. If there is not an environment where the communication is honest about "reality," projects tend to fail.

You don't need to depend on some of the intangible signs that a project is in trouble, there are a number of measurable signs as well:

1. Lots of overtime: A project running on schedule should have little or no overtime. Overtime is often a quick fix, but leads to poor employee health resulting from too much caffeine, too many late nights and too much junk food. (It also leads to mistakes.)
2. Diversion of resources: When people are pulled from one project to work on something else it could be a sign of trouble. If you've budgeted your human resources properly, a few hours here and there on a troubled project can quickly add up and cascade down, endangering healthy projects.
3. Ratios trouble: Cost ratios and schedule ratios are financial metrics that allow business leaders to measure budgeted time and money verses money and time actually spent. Without metrics, all you have to rely on is the accuracy of communication you receive from project teams.
4. Milestones aren't met: This is pretty obvious, but it is surprising how many times this warning sign is ignored. Small, discrete and often, are the guidelines for the milestones of a successful project.
5. Scope changes: A common approach to shoring up a lagging project is to change the scope. Eliminating features or relaxing requirements is not uncommon, but if project teams are doing it because the project is in trouble, it's a huge warning sign of danger ahead.

Of course, warning signs are not the work management harbinger of doom, they are just warning signs that a project might be in trouble. Depending on how your organization handles project-based work, the right project management tools can help identify potential problems early, when there's still time to do something about them.

How do you spot failing projects early—when there's still time to take action?