How to Manage the Complexities of Projects That are Too Large, Too Long, and Too Costly

In the first article in the Complex Project Management, What’s All the Fuss About? series, we introduced the topic and discussed CPM trends. In the second article, we presented the new, validated project complexity model. The model consists of nine complexity dimensions that may (and often do) exist on highly complex projects and programs. In this and subsequent articles we will discuss each complexity dimension in detail.

This article considers the unique complexities of large, long-duration, high-cost projects that pose challenges to project success, and offers both old and new management strategies to handle the complexities. Refer to Table 1: Size/Time/Cost Complexity Profile to examine the nature of these project characteristics as the size/time/cost dimensions increase.

Complexity Dimension #1: Size/Time/Cost

Table 1: Size/Time/Cost Complexity Profile

What Makes Large, Long, High-Cost Projects Complex?

Of the various elements that combine to make long-duration projects complex, the most significant is the inevitable changes that will occur in the business environment, which will necessitate adjustments to virtually all elements of the project. Knowing this, the successful project leadership team evolves, practicing situational project leadership, adapting and modifying their approach to accommodate the inevitable changes. In addition to adapting to change, the sheer size of the work involved for large projects weighs heavy on the project team. Research has demonstrated that the smaller the project team and the fewer deliverables, the greater the likelihood of project success. Therefore, the project leadership teams needs to reduce the size of work packages to “seem like” many small projects, as opposed to one very large endeavor. As a final point, team fatigue and burnout lead to complex human interactions and unavoidable staff turnover, both of which are difficult to predict and manage.

Managing the Complexities of Large, Long, High-Cost Projects

The complexities of large projects require that particular attention be directed to planning the project, developing and delivering the solution, selecting team members, and sustaining a high-performing team over the long haul.

Planning the Project

Six important strategies for planning and structuring large, long, high-cost projects are offered, both conventional and adaptive in nature:

1. Adaptive management approaches complement traditional practices

2. Progressive elaboration allows the project to evolve

3. A systematic, reliable approach to estimating increases confidence and accuracy

4. Rigorous time and cost management increases reliability

5. Stage-gate management enables continuous improvement

6. Rigorous risk management pre-empts challenges and seizes new opportunities

ADAPTIVE MANAGEMENT APPROACHES COMPLEMENT TRADITIONAL PRACTICES
For large projects, the ability to adapt is the difference between success and failure. The leadership team should analyze the situation, correctly answering questions like: Is this really a program? Is it a series of modestly scoped, small projects? Must the project or program deliver a product line, a system of systems? Can the solution be delivered in components? Only after this analysis should management decisions be made. In particular for long-duration projects, success depends on selecting the management approach best suited to deal with the changes that will inevitably occur. The team strives to recognize the nature of the problem and solution, and to understand whether the conventional, reductionist systems/software engineering and project management approaches will work effectively. Only then can we make the right choice of management approaches (e.g., conventional vs. adaptive techniques, appropriate project cycles, the best project team structure). It is also prudent to build continuous customer and end-user evaluation and feedback into the approach to ensure that the project delivers what is needed—which often is not what was originally proposed for large, long-duration projects.

PROGRESSIVE ELABORATION ALLOWS THE PROJECT TO EVOLVE AND THE SOLUTION TO “EMERGE”
Continuously improve and add detail to the project approach as more information becomes available. Allow more accurate and complete plans to emerge from the successive iterations of the planning process. Instead of trying to plan the entire project, start by scheduling only the activities to define firm basic requirements. Then, begin to plan activities to develop a conceptual design of the solution at a high level, resisting design decisions that will impose constraints.

A SYSTEMATIC, RELIABLE APPROACH TO ESTIMATING INCREASES CONFIDENCE AND ACCURACY
Estimating is hard, very hard. One precondition to being assigned as manager of a complex project should be a track record of developing reliable estimates. To increase reliability, use multiple estimating techniques. Educate your project sponsor and other key stakeholders about the fallibility of estimates in general and discuss the reliability they can expect from your specific estimates at key points in the project. Without a doubt, early estimates will be highly unreliable, exhibiting a wide range of variability. Numerous uncertainties are involved when building something unique with a team that has not worked together in the past. However, once the project has executed through a few iterations (if using incremental techniques) or through a few project phases (if using linear techniques), you can begin to gauge the speed of progress and adjust your original estimates accordingly.

RIGOROUS TIME AND COST MANAGEMENT INCREASES RELIABILITY
Delivering on schedule is one of the main challenges for a long-duration project, simply because of the enormous amount of work to be accomplished. Implement a rigorous process for tracking progress and controlling output. Track progress to the next milestone or release scrupulously. Manage the schedule and budget by establishing a project support team to update and maintain the schedule and budget baselines; emphasize to team members that they should bring any issues that put the next milestone/release in jeopardy to your attention immediately.

STAGE-GATE MANAGEMENT ENABLES CONTINUOUS IMPROVEMENT
Stage-gate management can be used to create opportunities to gather feedback from your customers and your team members on a frequent basis. After completing each phase, iteration, or release, conduct informal team-based quality reviews of deliverables. As part of these reviews, determine what worked well and identify opportunities for improvement to the solution development process and team operations. Subsequently, conduct a formal external quality assurance review of major deliverables and incorporate actions to correct defects found in the deliverables that must be resolved before work can proceed. Update the project cost, schedule, and scope baselines for the remaining near-term project phases/iterations, incorporating lessons learned into the plans. As part of the review process, examine the business case to validate that business benefits will be achieved and the investment is still sound. Conduct a formal project review with the project sponsor and other key stakeholders to secure approval to formally launch and expend funds for the next phase/iteration.

RIGOROUS RISK MANAGEMENT PRE-EMPTS CHALLENGES AND SEIZES NEW OPPORTUNITIES
Few projects perform adequate risk management. For large, long-duration projects, it is essential to identify risks after each iteration/phase and re-examine risk responses to:

• Ensure the risk response plans are managing known risks

• Identify new risks and develop risk response plans

• Identify new project dependencies and interrelationships and develop dependency management plans

• Identify previously unknown opportunities to increase the business value of the solution

Developing and Delivering the Solution

Five important strategies, both conventional and adaptive, to deliver the solution on large, long, high-cost projects are presented:

1. Iteration is the best defense against uncertainty

2. Scope minimization is the key to success

3. Last responsible moment decision making keeps your options open

4. Rapid application development reduces time to market

5. Lean development techniques increase efficiencies

ITERATION IS THE BEST DEFENSE AGAINST UNCERTAINTY

“Projects should always be managed by rapid learning cycles because what we are doing is so complex that nobody knows the answer to begin with.”
—T. Gilb, software engineer and author

Research has repeatedly demonstrated that short-duration projects are more likely to be successful than prolonged endeavors. Oftentimes business transformation projects involve a mix of complex development efforts, such as business process reengineering, legacy IT system replacement, and the creation of new, innovative business practices that rely heavily on technology. To increase the probability of project success, structure your project into multiple deployments of small solution components rather than taking the “big bang” implementation approach. As you develop and deliver the solution in increments, incorporate lessons learned from each increment into the next iteration and constantly test for alignment with business objectives.

The Standish Group Recipe for Project Success (Table 2) asserts that “success is practically in the oven” when a project follows this recipe. Standish reports that it is prudent to reduce the amount of resources to no more than four people, for no longer than four months, at a cost of less than $500,000. For large, long-duration projects, the only way to get the resources down to this level is to structure the effort into a program comprising multiple projects and to use incremental/iterative solution development.

Table 2: Standish Group Recipe for Success, 2001

SCOPE MINIMIZATION IS THE KEY TO SUCCESS
The motto of 21st century projects is: “Barely sufficient is enough to move on.” The more features and functions, the larger the project; as we have discovered, less is more. Initially, deliver a minimum viable subset of the full solution to start adding value for the organization as early as possible. Then, continue to deliver components of the system in short-interval deployments. Limit the dependencies between solution components to reduce the cost of changes. Design the solution to be flexible and agile to allow the customer to respond to changes in the business need, technology, or market conditions. End the project when the return on investment in additional increments is marginalized.

“LAST RESPONSIBLE MOMENT” DECISION MAKING KEEPS YOUR OPTIONS OPEN
Flexibility comes from delaying design decisions and the start of major activities for key project drivers (information flows, technical decisions, and business decisions) until the last responsible moment; that is, the latest moment possible without compromising cost or schedule. This “keep your options open” approach allows for maximum flexibility.

RAPID APPLICATION DEVELOPMENT REDUCES TIME TO MARKET
If requirements are understood and scope is contained, rapid application development (RAD) allows for a greatly abbreviated timeline. RAD is a method of fielding multiple design/build/test/deliver teams to work concurrently. This component-based approach permits incremental testing and defect repair, significantly reducing risk compared to single, comprehensive delivery. Caution: RAD can be costly if (1) requirements aren’t well-defined, causing a high risk of requirements defects, or (2) the design is not sound, with a minimal number of well-understood dependencies between increments, which can create a high risk of integration and maintenance issues.

LEAN DEVELOPMENT TECHNIQUES INCREASE EFFICIENCIES
Even though the project is long and complex, do not be tempted to apply more rigor than necessary. Produce documents and conduct meetings only if they add value to the project. Continually verify that the project is building the minimum viable solution. Keep in mind the motto: “Barely sufficient is enough to move on.”

Selecting Team Members and Maintaining Team Health

For complex, long-duration projects, we offer three suggestions for maintaining team health:

1. Select team members for the long haul

2. Attention to team health pays dividends

3. Share resources to give team members a break in the action

SELECT TEAM MEMBERS FOR THE LONG HAUL
When selecting team members for a long-duration project, keep in mind the special personality traits and coping skills that are needed. Prolonged forced interaction is simply not for everyone. For key positions, select team member who are resilient against social burnout and psychological stress.

ATTENTION TO TEAM HEALTH PAYS DIVIDENDS
Longer projects require that attention be directed to the physical and emotional stresses on the project team members. Focusing on the health of the team, making strategic personnel changes at critical junctures to infuse new blood, and providing appropriate team leadership will go a long way in sustaining the team.

SHARE RESOURCES TO GIVE TEAM MEMBERS A BREAK IN THE ACTION
On long-duration projects, critical resources may not always be fully engaged. When this is the case, “lend” them out to a short-duration effort to give the team members a break, allow them to feel the gratification of completing a task or meeting an objective, and then bring them back to your project refreshed and ready to dive back in.

Summary

Large, long-duration, high-cost projects are highly complex, and therefore, high risk. Strive to understand what makes these types of projects complex: the constant change bombarding organizations today that the project must adapt to, the sheer size of the solution to be constructed and the resources needed, and the inevitable team stress and fatigue. Using special techniques to plan and structure the project, develop and deliver the solution, and keep team members motivated for the long haul will help you increase success. Both conventional and adaptive approaches are needed for large, long-duration projects to be successful (Table 3)

Table 3: Approaches for Managing Large, Long, High-Cost Projects

Author:  Kathleen B. (Kitty) Hass, PMP, Senior Practice Consultant

Kitty is the president of Kathleen Hass and Associates, Inc., a consulting practice specializing in the business analysis (BA), complex project management (CPM), and strategy execution through portfolio management. Ms. Hass is a prominent presenter at industry conferences, author and facilitator. Kitty has authored numerous white papers and articles on leading edge PM/BA practices, the renowned series entitled, Business Analysis Essential Library, a compilation of six titles on critical BA practices, and the PMI 2009 Book of the Year, Managing Project Complexity - A New Model. To download more free information about the only Complex Project Management support services available in the marketplace, visit us at www.kathleenhass.com or contact Kitty at [email protected].

ⁱ Linda Vandergriff, Complex Venture Acquisition, 2006. Complexity Conference White Paper.
ⁱⁱ The Standish Group International, Inc. Extreme Chaos, 2001.
ⁱⁱⁱ ibid.
^iv Robert Lane, Vincent C. Lepardo, Graham Woodman, How to Deal with Dynamic Complexity on Large, Long Projects. Online at http://www.pbworld.com/library/technical_papers/pdf/32_HowtoDealwithDynamicComplexity.pdf, accessed January 2008), p. 5.

This article was adapted with permission from Managing Complex Projects, A New Model, by Kathleen B. Hass. ©2009 by Management Concepts, Inc. All rights reserved. www.managementconcepts.com/pubs.