12 Leading Indicators of Troubled Projects

Signs that a project may be headed for trouble (cost overruns, late delivery or quality issues) always occur well in advance of the problems actually taking root.

After independently observing companies executing projects and programs over the last 30+ years, here is my list of leading indicators, and at least one mitigation strategy organized into the three components every initiative includes: Time, Money and Organization.

Time Indicators

1. Supplier or internal project teams are frequently missing their major/minor milestones.
   • While poor or faulty planning could explain why this is happening (an issue in its own right), there may be larger problems lurking in the shadows. If this is happening enough to discern a pattern or trend, immediate action would be prudent.
2. Substantial differences exist between a supplier’s reported status and your employee’s perception of progress.
   • Differences of opinion happen all the time during the normal arc of a project. But when significant or contradictory perceptions are present, it’s time to take a close look at whose version of the truth best represents the current reality.
3. Conversations about implementation dates are being discussed without definitive planning information.
   • Regardless of whether technology is involved, the success of a project relies on being able to create and execute the detailed planning needed to bring the project over the finish line. Deferring those activities (or worse – ignoring them) is playing with fire.
4. The project completion date continually drifts into the future with no end in sight.
   • Underlying causes for this can be due to: ever-expanding scope, lack of commitment to close the project, vendor competency, etc. Whatever is causing the delay (and it may be multiple things) needs to be addressed at the appropriate level (or levels) within your organization.

Money Indicators

1. Costs are accruing at a burn rate significantly higher than expected for the current phase of the project.
   • While most think this is a “no brainer”, really understanding this trend early can make the difference between a predictable outcome or a surprise ending.
2. Someone is looking for financial support to significantly change the cost of the project/program.
   • When this occurs typically one or two things has happened: 1) the true scope and cost of the initiative has been revealed, or 2) the budget, and possibly any contingency, is about to be consumed before the project completes. Immediate action might help with #1. At the very least #2 needs a revisiting of the project portfolio.
3. You are angry with you vendor because their initial estimates and now current costs are significantly different.
   • When this happens it is time to stop and review just what has been asked for and committed to. While in many cases it is appropriate to hold the vendor responsible, internal control and leadership issues could be the primary drivers behind the cost discrepancy.
4. Complaints about the lack of resources available to get the work completed are increasing.
   • Usually this is the manifestation of an early stage planning and estimation problem, where unrealistically low estimates are used as a baseline. Regardless of what resources are in play, projects seldom complete on-time and with the expected benefits if insufficient resources are allocated.

Organization Indicators

1. Confusion in review meetings regarding scope and direction of the project.
   • Trouble in this area usually starts innocently enough, with an off-handed comment or a small amount of rework that is easily accommodated. But when questions and disagreements over what has been done and what’s left to do start to dominate reviews, expectations on all sides need to be re-aligned.
2. The same open items are discussed repeatedly with seemingly no progress.
   • Some habitually open items exist with almost every project for a variety of easily addressed reasons. But if the items are significant, this signals that some sort of blockage or stoppage has occurred. Inquiry into the nature of the slowed progress might reveal an unexpected problem.
3. Constant finger pointing over responsibility for missed milestones.
   • “Who” may not be the issue. If this is happening where you are, start with finding out “how” responsibility has been defined. This may in itself answer the “why” milestones are being missed.
4. You are frequently involved in change of scope meetings.
   • There are a number of valid reasons why this may be happening. And as scope changes so can the price, delivery schedule and quality of the end result. If the change of scope meetings don’t include discussions about money, time and deliverables, it may be time to do a reality check against current expectations.

Time does not help an initiative in distress.

Naturally, not all indicators are created equal. But if any of these indicators resonates with you, time is of the essence. For a quick, confidential analysis of the leading indicators based on your current situation, contact me today.