10 killer project wastes

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Large corporates with significant Enterprise Portfolio Offices (EPOs) are seeking to achieve greater returns on their project investments. Most are not trying to reduce their project spend but want more for their buck.

This is a natural question and one that should be asked of all functions on a regular basis. The challenge for EPO’s is that the objectives of each project can be quite unique and they see limited opportunity for systemic improvement.

In order to address the issue more fully, the question should be framed as an opportunity to identify and eliminate project waste. This reframe will uncover more systemic opportunities to improve the projected return on investment. It will also provide a strong rationale for where to focus the effort for the best return.

Below are 10 killer project wastes I have identified from my long career of designing, implementing, governing and funding large and complex projects. These wastes are not mutually exclusive and not exhaustive.

1.      Project Selection Waste.

Large organisations tend to run a large and complex portfolio of projects with an annual spend from a low of approx. $50m to + $10B. The question for these organisations is have the right combination of projects been selected to maximise the long-term wealth? Unfortunately, many organisations do not have sophisticated prioritisation methodologies leading to suboptimal solutions. This plays out as debates, political maneuvering or worse accepting all proposed projects. It feels like things are getting done but are things getting better?

2.      Project Definition Waste.

This is where many projects go off the rails. The interplay between planning, estimating (both cost and benefits) and initiating projects effectively is not well executed. Many organisations have a very poor process if any at all leading to scope, volume and rate errors. This manifests itself with reported large variances to plan. Without a repeatable, managed and measured process there is no hope of making improvement over time. The organisation is hostage to the ability of the project team at that time.

3.      Alignment Waste.

Alignment waste is an insidious and invisible waste of a project. The project manager is most powerful at the beginning of a project. This is when that power should be used to align all the stakeholders to ensure that friction is low and the project will be effectively executed. This includes the take-up and change effort for success. In some organisations, this is the responsibility of the sponsor. This may be so but the project manager is the project expert and should be the catalyst for this alignment to occur.

4.      Solution Waste.

Those responsible for the solution design conduct insufficient research to ensure the problem is truly understood, the success measures agreed and the very best solution is proposed. Unfortunately, the design is often the result of what is known not what is knowable. It is no longer acceptable to say we did not know ‘X’ existed. Good research sometimes leads to a wait recommendation as the right technology or other input is not yet adequately developed.

5.      Team Waste.

Post Implementation Reviews (PIR’s) often indicate that there were weaknesses in the team. It is often articulated as skill, will, budget or availability issues. Even when recognised it is often left to fester for too long and affect the performance of the project. Another form of team waste is the time it takes for the project to team to pass through the stages of forming, storming and norming to reach performing. This is not a difficult waste to overcome if it is appropriately monitored and action taken early. (Read The 5 Dysfunctions of a Team by Patrick Lencioni).

6.      Scope, Time and Activity Waste.

This is the loss due to coordination, collaboration and inappropriate standard of work issues. Achieving an appropriate cadence and timely communication can save a lot of waiting and wasted effort. Solving problems as they occur rather than letting them grow into something much larger and needing more effort to solve can be a real project killer.

7.      Decision Waste.

Decision waste generally comes in two forms. The first is waiting for a decision. It can be very frustrating but often a self-inflicted wound when the project team has not prepared the groundwork for a quick decision. The second is reaching a poor decision. When things are uncertain it is very easy to reach a poor decision. There are approaches available to reach better decisions working with uncertainty. (Read Thinking fast and slow by Danial Kahneman).

8.      Sourcing Waste.

Poor procurement practices can lead a project into serious trouble. When critical equipment does not arrive on time things can come to a standstill. If the product or service is not fit for purpose it too can have ramifications for the project.

9.      Poor Quality of Output waste.

Nothing is more frustrating when solutions need to be tested, repaired and retested. If the quality of output is poor the project can end up in a wasteful loop. Building in the quality along the way can save considerable time and resources. Package small and test early and often to reduce the likelihood of this waste getting out of hand.

10.  Value Potential Waste.

Leakage of business case defined benefits is one form of value potential waste. Another is failing to put in place a benefits enhancement (continuous improvement) process to refine the output to achieve even greater benefits.

Having identified the major forms of project waste the EPO is in a better position to measure the waste and prioritise effort to improve performance through systems, processes, selection and training.

Your comments are welcome on the waste list and approaches to systemically reduce project waste.

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