Communication- Key element for Project Success

There is a consensus among Project professionals at large that Communication is the most important factor which impacts the success of a project. 55% of the Project Managers believe that Communication is the most crucial factor in success of a project.

Can the importance of communication in successful delivery of a project be quantified? I will try to answer this question in this article.

PMI ( Project Management Institute ) did a study in 2013 on this issue which published a report called PMI's Pulse of the Profession report. The Pulse study noted that an organization's ability to survive and even thrive was impacted by its ability to meet project goals, budget and timelines. This competency becomes even more necessary today in an era of "doing more with less", expanding global priorities and need to innovate.

The Pulse study also found that effective communication to all the stakeholders is the most critical factor in success of a project.

As per the study, for every USD 1 Billion spend on a project, USD 134 Million was at risk due to various factors. Out of this USd 134 Million, USD 75 Million, which is 56% of the risk amount is attributable to ineffective communication.

Effective communications leads to make an organization a high performer organization. And a high performer organization meets its project objectives within budget and time in 80% of the cases. These organizations which does not have effective communication face a risk which is 14 times more than a high performer organization. As per a Forbes study, nine out of 10 CEOs feel that Communication is critical to meet their strategic initiative. Similarly, as per Tower-Watson study of 2011-12, organizations with effective communication strategy have 70% more probability to outperform their peers on financial parameters.

Challenges in Communication:Though all the aspects of Communication are important, the two critical challenges faced by organizations are:

• Understanding of business benefits: It was observed that there was a disconnect between understanding of business benefits between Project Sponsors and Project Managers/Team. Whereas Project Sponsors and Owners felt that that they had communicated business benefits and alignment to organization strategy, Project Managers felt otherwise.

Challenge in understanding by various stakeholders due to poor language: All the stakeholders must understand one critical point - communication needs of other stakeholders are difference and project information should be conveyed in a language which they understand. For example, a technical team may be more comfortable to understand project deliverables, requirements etc. in a technical language, GANTT Chart, etc but a top management team may be more comfortable with hard numbers like financial nos. viz. cost, revenue, margin, ROI etc. So project information must be translated in a language appropriate to a particular stakeholder.

Based on my experience across projects in various sectors, I would like to add few additional points. A Project Manager must ensure that whenever a customer insists for a work which is beyond the approved scope, records must be maintained in writing about the clarity on scope, its cost and modality for remuneration. I know of many such cases where a Project Manager carried out the work in good faith on the verbal assurance of a customer and faced problem in realizing payment for the work done at later stages.

Similarly, if there are any factors attributable to customer which delay the project completion schedule, records must be maintained in writing with the customer. All such communication comes handy in minimizing and avoiding liquidated damages at the end of the project. Wherever there are delays due to Force Majeure reasons, notices/intimations must be sent to the customer within the prescribed time schedule in line with the Contract Agreement.

It has been noted that a high performer organization has a written communication strategy and plan. As a Project Manager, one must make Communication strategy and plan a part of Project Plan.