In our experience with composite projects, staff are seconded by business-as-usual (BaU) line managers to project work on the understanding that their primary role is not neglected. Their attitude is liable to be that they are lending the staff member’s time, almost as a favor. But we have already identified that in the modern corporation, staff are already at near capacity, so often, there is eventual conflict over time allocation. In that fight BaU, usually wins for several reasons. There is a cultural aspect: the individuals and their managers have an expectation that their primary role is critical and must not falter. This is supported by structural elements, such as business and personal objectives not including the project outputs. The attitude is revealed in conservations when people refer to their real work, that is, their normal work commitments outside the project. The phrase, itself, reveals what they consider to be important, and hence, given priority.
However, it is not always the project that misses out and so, there are risks. We have largely focused on staff capacity in terms of time, but there is also the effect of mental capacity, or as it is sometimes referred to head space. Regardless of time, there is simply only a limited amount of issues a person can think about at a time. It is hard to pin a specific business impact to a specific project cause, and sometimes, the day job is achieved in the short term, but issues occur in the medium term.
BaU Risk of Not Receiving Process Improvements
Business operations must continually improve to stand still in the market. It is successful projects that deliver these improvements. So, failure to run successful composite projects threatens BaU in the long term.
Line managers who do not enable their staff the time and space to contribute may see it as a win, but this is only in the short term. In the long term, if they compromise projects delivering BaU improvements, then eventually, they lose.
Risk of BaU Under-Performance Through Lost Resources During the Project
If BaU is under-resourced during composite projects, there is the risk of late reports, missed regular meetings, increased customer complaints, reduced speed of response, and deterioration of other operational key performance indicators (KPIs). Obvious impacts of poor business performance are increased costs, reduced revenue, or customer satisfaction and corresponding impact on organizational reputations.
The occasions this most often happens, when BaU resources become focused on the project, are when the composite project runs into difficulties. It is then the project absorbs more time and reduces focus on BaU.
Impact on the Staff Performance
Chapter 6 discussed the impact on staff. Many of the negative impacts on staff feed through to negative impacts on the organization.
- • Key people may not wish to be involved in projects again, which hurts the business long term.
- • Staff turnover—that invisible pain may only manifest itself when key people decide to leave.
- • Staff dissatisfaction and morale, which can spread and impact general performance and turnover.
Story: Payment System Pain
The following story illustrates the pain created in the organization from a project that runs into difficulties. In this case, the key project team members were managers from the payment departments.
A large UK company embarked on a program of projects to improve the efficiency and security of the process it used to transfer monies to its outlets. The program ran for multiple years and delivered several significant process and system improvements. One of those, a new module, proved to be extremely troublesome. It was designed to automate part of the process and improve financial control.
One of the authors ran the program from its inception. This project was the last for the overall program. On the face of it, things were going along well. The team had created a detailed set of requirements, the supplier was selected via a sound purchasing process, had done good work in the past, their design looked good, and so on.
We reached the user acceptance test (UAT) phase on the plan. A UAT confirms the business need has been met by the software. We required two weeks’ work from each of the department managers. The deep knowledge was embedded in these people and so, we had no choice about who could test. We had to be as efficient as possible with their time, so the UAT was planned with precision—scheduled to avoid month end, holidays, and so on.
However, the software was not of a quality suitable for UAT. The reasons were part of the detailed post-project review and are not relevant here. It meant that several further rounds of user testing were required. The payment managers understood the need for more testing and the need for their involvement but were exasperated. Not only was this more time away from BaU, but the new module would be late too. Their managers were even less impressed.
Arranging the extra testing was straightforward on a practical level. However, we had lost a great deal of support from the business. It was hard to convince them that the same thing would not happen again. They were reluctant to allow their staff to test again without guarantees about the software quality. The testers were also very disappointed and, understandably, became less motivated within the project and had to catch up on their day job.
Problems can occur in any project, but with a composite project, there may be additional risks to an organization’s performance. In this case, the unplanned additional involvement of the payment managers posed a risk to the accurate and efficient running of their department
As stated earlier, unrecognized composite projects present unrecognized risks. The size of Level 3 tactical projects means bad outcomes are contained. Level 1 strategic projects are big enough to have strong governance and so, bad outcomes are anticipated and managed. Unrecognized composite projects often lack strong governance, and so are prone to fail unexpectedly. The most frequent reputational damage comes from quality failure.
Organization reputation is synonymous with brand strength. It is won over many years from the many customer interactions and from media influence. Reputation is built when operational delivery matches or exceeds two key things: the promise made by marketing and public relations (PR) messaging and comparison with competition.
Importance of Organization Reputation
The organization’s reputation or brand is a key asset.
- • The stronger the brand, the lower price elasticity; in other words, the more it can charge for its products and services. A strong brand provides long-term revenue protection and potential growth.
- • The goodwill built with customers shields them somewhat when errors are made. Customers tend to give the benefit of the doubt to a company with a strong reputation. This reduces switching and the cost of remedy.
How Robust Are Reputations?
Strong reputations can survive operational mistakes. In fact, from a foundation of trust with the customer, making a mistake and doing a good job of correcting it can enhance reputation: say sorry, explain, fix the problem, and compensate.
However, some types of failures quickly erode reputations. Data breaches are damaging because they point to a process failure and a lack of care over customer information. Failure of business change projects represent an own goal, a kind of planned failure. This shows poor management. Finally, a breach of core brand values can be highly disruptive. Take the example of Arthur Andersen, founded in 1913, and by 2001, one of the big five accounting firms in the world with revenues of nine billion U.S. dollars. For much of its history maintained an enviable reputation for high standards and honesty, with a commitment to the investors over its clients. However, in 2001, a major client, energy giant Enron, was found to have misreported 100 billion U.S. dollars in revenue through institutional and systematic accounting fraud resulting in its collapse and huge losses for investors and employees. Arthur Andersen was seen to have failed to have upheld standards of competency and honesty. Its reputation was shredded, its clients deserted it, and within months, it ceased to exist.
Projects and Their Impact on Reputations
Successful projects do not make the news, such as the switch of Eurostar from Waterloo to St Pancras Station in London and the London 2012 Olympic infrastructure. Failures often do; you will all have examples such as the introduction of New Coke, the Ford Edsel, BP Oil Spill in the Gulf of Mexico, or the opening of London Heathrow Terminal 5. These projects lost billions and had a major impact on the long-term reputation of the organizations involved. Of course, these problems arise from failure of risk assessments of Level 1 projects, but they do illustrate the threat to organizations that do not understand the risks they are taking on.
Story: Operational Resilience
The following story illustrates how precious an organization’s reputation is and how people will go to great lengths to protect it.
A large organization had suffered two very costly reputational hits within a two year period. They were an integral part of the country’s national infrastructure. Two years later, they were required to perform a key role as part of a global sporting event. To this end, and given the worldwide exposure, they embarked on a project to ensure their operation could deliver a truly excellent experience, for tens of thousands of extra visitors, for the duration of the event. For the senior team, they recognized they faced a potential three strikes and you’re out. They also knew they were facing a hostile media and predicted high levels of scrutiny.
A year before the event, the organization put together a high-level plan. Delivery was to be a joint effort with their key long-term suppliers. One of the authors was engaged by one of them to help design their work package plan and implement it. There was a real buzz because of the nature of the event, and perversely, that people outside thought it could not be done.
Using the project triangle idea for this story, the quality of the planned operation was a given. The scope was non-negotiable and time was fixed. The senior team were going to protect or enhance the organization’s reputation at all costs. Therefore, it is easy to see which dimension was the variable. Having said that, there was obviously a need to prove value for money for the planned solution.
The work ran for a year, and it was obvious throughout that reputation was the key driver against which all big decisions were judged. Budget requests were rigorously examined, but when push came to shove, reputation won. The combined effort of the teams involved proved the doubters wrong. The scale of the job was immense, and the compliance need was strict. But, the project implemented successfully and customer service levels over the period were the best they had ever measured.