WHY PROJECTS FAIL (Part 3)

“We can start the project now to save time and pursue permits and approvals as we proceed.”

On the surface, this sounds like a sensible move. But it rarely works out in practice. It is a symptom of the schedule aggressiveness of E&P projects (and many other projects for that matter). This schedule aggressiveness is also greatly responsible for basic data errors resulting from the insufficient appraisal of reservoirs and the misplaced short-cut to understanding a reservoir’s properties by relying on data from nearby producing fields.

When you try to do a project faster than its natural pace, you create an environment where certain critical activities are rushed or skipped entirely, especially during project the front end development. It is not uncommon for project sponsors to attempt to start a project without carrying out EIA for instance (which is actually legally required almost everywhere). Needless to say, since the regulators are usually motivated by factors other than the speed of completion of your project, things often do get messy for such projects.

Schedule aggressiveness negatively impacts every other project outcome including schedule performance itself in many cases. As with many root causes of project failures, aggressive project schedules are typically a top-down phenomenon, with someone at the top – typically, a business or corporate executive – pushing for quick project completion to fulfil business objectives.

The technical people, however, always recognise this as a recipe for failure. Indeed, an aggressive schedule is one of the telltale signs of a project that is set up to fail, as such, the project’s promoters may struggle to attract a competent project director and/or project manager to steer the project.

So how do we solve this problem?

I believe that a two-pronged approach should do the trick. First, business leaders need to develop a sense for allowing the technical people to develop suitable schedules for projects.

Secondly, where the relevant data is available, the internally developed schedules should be compared with the actual schedules of already completed projects of similar attributes (size, location, industry, etc) to determine a correction factor that may need to be applied to the internally developed schedule to arrive at a realistic schedule estimate for the project. 

To read more about inaccuracy in project forecasts, The Planning Fallacy and the application of Reference Class Forecasting to project management, read https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2238013