Project Health

Projects are complex things and yet it's important for us to gain an understanding of whether our projects are in good shape or not.

Very often things like time, cost and scope traffic light indicators are used - I've done this myself.

The issue is that these things are all lagging indicators i.e. by the time we're in the red, it's too late - we're looking at a turnaround situation. What we need are leading indicators that give us a heads-up that things aren't quite rosy.

PricewaterhouseCoopers developed the Seven Keys for Success(TM) model some time ago (see note below). It takes a much more holistic view of project health and I've used it many times in the past.

The Seven Keys model looks at status across the following:

1. Stakeholders: are they committed?
2. Business benefits: are they being realised?
3. Work and schedule: work and schedule are predictable, deliverables accepted on time
4. Team: is the team high performing?
5. Scope: is the scope realistic and managed?
6. Risks: are risks mitigated?
7. Delivery organisation: is the delivery organisation realising benefits?

The beauty of this model is that it incorporates "sentiment" (i.e. how are the people doing?) as well as the traditional indicators. Experience suggests that these sentiment areas can be useful leading indicators that show where things are going wrong before issues such as schedule slip or being over budget show up.

This combination of "hard" and "soft" indicators is a much more mature approach to judging project health than just relying on traditional indicators. It's significant that financial indicators are missing completely from the model. It doesn't mean that budget/actuals/forecast aren't important, rather it means that in the big picture these things lag the important indicators by so much that they're hardly useful at all.

As a concrete example, the actual spending on a project depends not only on purchase orders being approved and issued, but also on the supplier's invoicing cycle which is rarely more frequent than monthly and I've seen certain suppliers withhold invoices for months for reasons of their own. Which all goes to say that the actuals recorded in your ERP are likely to be badly out of date even on a good day. Which means you have to rely on your PMs recording committed spending based on their own estimates - not an easy task.

In summary, these kinds of sophisticated measures plus similar ones are much more likely to accurately tell you whether your project is healthy or not than the traditional ones of time, cost and scope.

Note: The Seven Keys for SuccessTM model was originally developed, copyrighted and most likely trademarked by PricewaterhouseCoopers and was part of the AscendantTM suite of methods. It's unclear to me who owns the rights these days - most likely the copyright is owned by IBM due to the acquisition of PwC consulting by IBM in 2002. The trademark, however, seems not to have been renewed, but just in case I'm using the TM symbol.