Overcoming Pitfalls in Large Capital Projects

Overcoming Pitfalls in Large Capital Projects

While problems may seem unavoidable, you can avoid pitfalls and ensure the success of your large capital install projects. Your current projects can provide a learning experience if you identify the pitfall or failure it’s experiencing, then re-focus to get it back on track. You can then start your next project out right the first time. Read on to find out how.

Common Pitfalls or Failures

In an ideal world, effective project management would prevail every time. According to Information Age though, many large projects experience the same problems from organization to organization. The three most common include poor communication, missed deadlines and rising costs. Add to those three other issues which often arise: cultural/ethical misalignment, using inexperienced project managers and ignoring warning signs of failure.

  • Poor Communication: Each project team consists of members of executive management, project managers, and staff. Every level of the project temperature requires information access. While many projects use email to communicate, this creates communication issues since certain project directions, and discussion may reside only in a specific individual’s inbox.
  • Missed Deadlines: In large scale projects, especially, there exists a need for a big picture view and finite details. This requires effective planning concerning scheduling, assignments and progress monitoring. Each team functions best when provided accurate, consistent information that transparently guides a disciplined approach to engage all project staff. Without this guidance and tracking, projects derail.
  • Rising Costs: You can’t control prices, but you can better plan for fluctuations. A sub-benefit of effective planning is financial modeling along with risk modeling. If project costs rise in one area, having various budgets based on best or worst case scenarios can lead you to other costs you can cut to balance expenditures.
  • Cultural/Ethical Misalignment: Some firms simply do not have a culture that encourages every team member at every level to invest themselves totally in the firm’s and the project’s success. The three key cultural needs are competence, pro-activeness, and professionalism.
  • Inexperienced Project Managers: Every project manager had their first project once, but not all perform the same on their first few projects. An inexperienced manager can inadvertently tank a project. Choose project managers based on their experience and education.
  • Ignoring Warning Signs: Related to inexperienced project managers and poor planning, many projects fail when leadership ignores warning signs. This negates the potential for salvaging the project.

To best succeed in your project make an early commitment to risk assessment. This includes devising mitigation techniques for each risk. Set up a risk monitoring mechanism with a trigger for each that signals the need to institute the mitigation actions.

Getting Back on Track

Experiencing problems doesn’t guarantee failure. You can get a capital project back on track. Once you’ve identified the problem, it is a matter of developing a recovery plan to stabilize things and enacting it. Follow six steps to realign the project:

  1. Assign a new project lead to diagnose issues.
  2. Have the new lead develop a recovery plan with specific milestones, schedule and budget. This new lead works with stakeholders to build an accurate project picture and plan.
  3. Stabilize the project by involving new staff and identifying and mobilizing new resources.
  4. Transition to a dual focus operating model that makes room for tactical and strategic actions. This best serves day-to-day project management and long-term milestone success.
  5. Own the turnaround by actively participating in positive change that rectifies the problem. This means you serve as the catalyst for problem-solving.

Making Next Time Better

Combining experienced personnel and technology can ensure success in the future. Establishing and maintaining a positive work culture that encourages employees and motivates an ambitious, driven, success mindset is another must.

To best succeed in your project make an early commitment to risk assessment. This includes devising mitigation techniques for each risk. Set up a risk monitoring mechanism with a trigger for each that signals the need to institute the mitigation actions.

Train your team members. Evaluate their roles. Assign responsibilities with respect to their experience. Ensure ownership of the process and project by all. Conduct an operational risk assessment at the outset of the project. Tie this to goals and objectives to improve success potential.

Develop a risk register as part of the risk plan. This organizes each risk into categories and designates how critical each is. This integral part of your risk plan help you prevent, reduce and transfer risks. It also assigns ownership/responsibility for each risk.

Keep the project team and executives up-to-date with regular, formal reports. You’ll need a daily option and summary reports. This solves one of the major issues of communication.

Continue risk assessment throughout the life of the project. Recognize that it is not a one-time undertaking. As you identify new risks, add the mitigation techniques for them and add them to the risk register.

Make monitoring progress on each milestone and goal a team-wide priority. This contributes to cost and schedule controls.

Learn more about how we can help your business.

Leverage a cloud project management solution that can help document the plan and milestones. These Software-as-a-Service (SaaS) solutions offer built-in automation that benefits project timeliness and goal achievement. Management solutions do this by making real-time data constantly available and sending daily reminders to keep project milestones on track. It also embeds and automates monitoring.

While common pitfalls can temporarily derail a project, you can put it back on track. Implementing the suggestions herein can ensure your future projects stay on track from the outset. Contact Starr & Associates for assistance in implementing a SaaS solution that empowers your future capital projects.