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Why
Good Projects Go Bad: Preventing Project Management Meltdown
by Michael G. Addario & Lloyd
S. Weber
illustration by Tom Curry
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 A
software company successfully launched its first product in
its market—a groundbreaking application. The company received
awards, sales picked up, and a well-known entrepreneur invested
fourteen million dollars in the venture. A year later and
out of money, the company desperately sought a buyer or merger—unfortunately
having rejected a $150-million buyout offer eight months earlier.
What happened? Sales of software release 1.0 dried up because
new versions of the product were announced. Millions of dollars
of orders were in the pipeline, but the company could not
deliver the new versions. With its earlier success and infusion
of cash, why couldn't this company deliver the software? It
suffered from a common business epidemic—poor project management.
The causes of which are complex and pervasive throughout most
organizations.
The Standish Group, an independent research firm, recently
reported that in large organizations—including private and
public sector organizations—9 percent of projects come in
on time and on budget, 52 percent wildly exceed their original
estimates, and 31 percent are cancelled before completion.
Information Technology (IT) and software project failures
have led to increased awareness of, and interest in, project
management. The International Organization for Standardization,
for example, became involved leading to the development of
ISO 10006 Quality Management—Guidelines to Quality in Project
Management. ISO 10006 has been adopted as a standard by nearly
one hundred member nations since 1997.
The Project vs. the Organization
An understanding of why projects fail can be gained by examining
what appear to be two separate forces that contribute to failure:
the dynamics of the project itself and the dynamics of the
organization.
These forces represent two distinct states: the project, a
temporary state, and the organization, a permanent state.
If left unrecognized and unattended, interaction between these
two forces can produce catastrophic results.
Project Dynamics
 The
dynamics of projects are dominated by rules of engagement,
which are the basis for project planning and decision making.
Rules of engagement are a blend of management and effort elements
used to establish quality objectives for a project. These
elements may be aligned in a matrix to achieve project balance.
Effort elements are performance, cost, and schedule. Performance
includes the functions, features, and benefits of the product
or service being developed. An example might be a system that
must process four thousand transactions per minute or a product
that must weigh less than four ounces. Cost includes the financial
resources budgeted to achieve the specified performance level
of the product or service. Schedule is the time it takes to
achieve the specified performance in the product or service.
Management elements are: maximize, constrain, and accept.
These elements specify how each of the effort elements is
treated during the project. Maximize means that the effort
element cannot be negotiated or adjusted. Failure to achieve
the maximized effort element results in project failure. Constrain
means the effort element can be negotiated, allowing some
flexibility without adversely affecting the project results.
Accept means the effort element is accepted to achieve the
specifications of the other two effort elements.
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