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Chapter 14 Project Closure Chapter Outline 1. Types of Project Closure A. Normal B. Premature C. Perpetual D. Failed Project E. Changed Priority 2. Wrap-up Closure Activities 3. Project Audits A. The Project Audit Process i. Guidelines for Conducting a Project Audit ii. Step 1: Initiation and Staffing iii. Step 2: Data Collection and Analysis iv. Step 3: Reporting B. Project Retrospectives C. Project Audits: The Bigger Picture 4. Post Implementation Evaluation A. Team Evaluation B. Individual, Team Member, and Project Manager Performance Reviews i. Individual Reviews 5. Summary 6. Key Terms 7. Review Questions 8. Exercises 9. Appendix 14.1: Project Closeout Checklist 10. Appendix 14.2: Euro Conversion—Project Closure Checklist 11. Appendix Case A14.1: Maximum Megahertz Project 12. Epilogue Chapter Learning Objectives After reading this chapter you should be able to: LO 14-1 Identify different types of project closure. LO 14-2 Understand the challenges of closing out a project. LO 14-3 Explain the importance of a project audit. LO 14-4 Know how to use project retrospectives to obtain lessons learned. LO 14-5 Assess level of project management maturity. LO 14-6 Provide useful advice for conducting team performance reviews. LO 14-7 Provide useful advice for conducting performance reviews of project members. Review Questions 1. How does the project closure review differ from the performance measurement control system discussed in Chapter 13? Project closure review is a macro view of project performance as a part of the total organization. Although closure is concerned about current or past performance of the project, project closure is also concerned with assessing organizational culture and support of projects, the project’s fit within the total portfolio of projects, project priorities, team performance, and lessons learned. The closure review is intended to include all factors relevant to the project and managing future projects. 2. What major information would you expect to find in a project review? Classification of the project—e.g., large/small, platform/incremental, complex/ typical Analysis of information gathered Recommendations Lessons learned An appendix with backup information to support recommendations. 3. Why is it difficult to perform a truly independent, objective review? In most cases those performing the review have some previous knowledge of the project, which presents opportunities for bias. Sometimes the review team, or facilitator, is perceived as a jury, but even jury members come with built-in biases. For example, internal politics have been known to enter into decisions concerning closure of a project. The simple point is that every attempt should be made to keep the review independent and objective. If the review of projects is a regular procedure for all projects, the negative stigma of audits is minimized. 4. Comment on the following statement: “We cannot afford to terminate the project now. We have already spent more than 50 percent of the project budget.” This is sometimes called the sunk cost fallacy. If organizational priorities have changed so the project no longer supports organizational strategy, the project should be terminated. Basically, costs to the time of the audit are sunk costs. The decision to continue or shut down should rest on estimated future costs and project benefits. 5. Why should you separate performance reviews from pay reviews? How do you do this? These two activities are not compatible. It is difficult to be both a judge and a coach at the same time. Performance reviews are intended to encourage changes in behavior, encourage career development, and support continuous organizational learning. These reviews focus on social and technical contributions the individual contributed to the project team. For example, the 360-degree feedback process has been used successfully to improve the ability of people to work on teams. As long as performance reviews are not directly related to pay and promotion decisions, such reviews are more readily accepted and even perceived as positive for the individual and organization. Since pay reviews can result in negative or positive outcomes for a career, they are perceived as very serious by most individuals. Pay reviews should be more carefully structured and based on clear standards and criteria known to the person being evaluated. Every attempt should be made to avoid confrontation. 6. Advocates of retrospective methodology claim there are distinguishing characteristics that increase its value over past lessons learned methods. What are they? How does each characteristic enhance project closure and review? Uses an independent facilitator. The facilitator is held responsible for identifying and implementing lessons learned. Independence encourages gaining more information from stakeholders. Includes a minimum of three in-process learning gates during the life project cycle. These gates catch problems and success during project execution (while the project is in flight). Corrective action can be taken immediately Each retrospective has an owner. Assigning an owner who has knowledge and an interest in the retrospective, provides a resource for other project managers who wish to acquire more firsthand information. Develops a repository that is easy to use. Such a repository is a basic requirement of retrospective methodology. Typically, this repository is an electronic search engine that allows the client to selectively search by project characteristics. Mandates a discipline that ensures retrospective are used. Managers of a future project are required to review retrospectives of similar projects. Failure to avoid a problem or use a success noted in a past retrospective has dire consequences. Exercises 1. Consider a course that you recently completed. Perform a review of the course (the course represents a project and the course syllabus represents the project plan). Students have a tendency to want to evaluate classes in which they were dissatisfied with how it was conducted. Their emotions may get in the way of objectively assessing the class as a project. This can be used to reinforce the importance of an independent auditor. Below is how one instructor adapted this exercise for a Final Exam. Assignment A. You are the facilitator who has been assigned the task of conducting a review and closure evaluation of a project titled: “BA364, spring 2017.” Project Team: Instructor and two teaching assistants. Organization: College of Business. Customer: Students. Project Objective: Conduct the four-credit course, BA364, spring 2017 (including weekly lectures, assignments, class exercises, and help sessions). Assigned Staff: One instructor and two teaching assistants. B. Your accuracy, candor, and effort are of significant importance to the organization. C. Be sure to provide adequate detail (justification, explanation) on each question. It must be neat and readable! PROJECT CLOSURE & REVIEW Organization (College of Business) VIEW 1. Was the organizational culture supportive and correct for this type of project? Why? 2. Did the project accomplish its intended purpose? (Provide details.) 3. Were the right people and talents assigned to this project? (Provide details.) 4. Was the customer satisfied? (Provide details.) Project Team (Instructor, Teaching Assistants) View 1. Were the project planning and control systems appropriate for this type of project? (Provide details.) 2. Did the project conform to plan? (Provide details.) Other Pertinent Comments 2. Imagine you are conducting a review of the International Space Station project. Research press coverage and the Internet to collect information on the current status of the project. What are the successes and failures to date? What forecasts would you make about the completion of the project, and why? What recommendations would you make to top management of the program, and why? The International Space Station (ISS) began with the launch of a Proton rocket on November 20, 1998. The space shuttle Discovery landed for the last time on March 9, 2011 after delivering the final American piece of the ISS. However, the addition of modules from other countries are scheduled through 2019. Given the sheer size and scope of this mammoth project, it is under constant public scrutiny. Students have ready access to news accounts of the project. A good starting place is entering “International Space Station” in an Internet search engine. An alternative approach would be to choose another project that has received extensive news coverage (construction of a sports stadium, an expedition, or new product). 3. Interview a project manager who works for an organization that implements multiple projects. Ask the manager what kind of closure procedures are used to complete a project and whether lessons learned are used. Students who interview small organizations frequently find close-out processes are not well organized and even ignored. However, those who interview managers in organizations with high levels of project maturity, find most of the activities from the interview relate closely to the chapter content. This exercise can be adapted to executive classes by having students report on their own organizations. 4. What are some of the lessons learned from a recent project in your organization? Was a retrospective done? What action plans were generated to improve processes as a result of the project? This exercise requires students of the class have some experience with projects and knowledge of lessons learned. In such classes, typical positive and negative topics discussed are: Organizational culture Team Process Virtual project issues Scope control Process Communication Change control Contractor interface Cost Clearly, these topics are only a beginning. Formal retrospectives tend to appear most frequently in organizations that have multicultural and multiple virtual projects. The impetus for some international organizations was simply the benefits of lessons learned were not being communicated or acted upon; hence, the appearance of retrospectives. Today, the retrospective process is filtering down to be used in all organization projects. (See review question # 6.) Case A14.1 Maximum Megahertz Project Olaf Gundersen, the CEO of Wireless Telecom Company, is in a quandary. Last year he accepted the Maximum Megahertz Project suggested by six up-and-coming young R&D corporate stars. Although Olaf did not truly understand the technical importance of the project, the creators of the project needed only $600,000, so it seemed like a good risk. Now the group is asking for $800,000 more and a six-month extension on a project that is already four months behind. However, the team feels confident they can turn things around. The project manager and project team feel that if they hang in there a little longer they will be able to overcome the roadblocks they are encountering—especially those that reduce power, increase speed, and use a new technology battery. Other managers familiar with the project hint that the power pack problem might be solved, but “the battery problem will never be solved.” Olaf believes he is locked into this project; his gut feeling tells him the project will never materialize, and he should get out. John, his human resource manager, suggested bringing in a consultant to axe the project. (Rest of case not shown due to length.) This case relates to an organizational need for a process to terminate projects early when the original project objectives cannot be met or are no longer relevant. The case also points out the need for organizational learning. As the discussion continues, the scope of the discussion will expand to an integrated process which includes the content of earlier chapters—mission, priority, definition, resources, control, culture, team membership. How the case is used conditions the responses from students. If the case is used for class discussion, the responses will concentrate on review and the issues stated in the last paragraph of the case. If the case is used as a written assignment, responses are more inclusive with less attention directed to the issues of the last paragraph of the case. Below are typical excerpted written responses from undergraduate students. Problem No system for accepting projects No priority system, no standard criteria for selection Poor project definition System does not catch errant projects early in the process. Symptoms Over budget, request for $800,000 is more than original project cost estimate Project is four months behind and six more are requested Three projects never completed Cost overruns and deadlines are being pushed. Problem Cause Lack of planning in process auditing, which must be supported by an integrative project management system and culture No leadership in developing an integrative project management process for Maximum Megahertz. Action Plan Short-Run First, use the Dawn O’Connor approach on this project for a gut check. Simultaneously, form a new project review team for this project. If the outcome is positive (which is doubtful), provide time and money but with strings attached—e.g., redefine scope, set a firm schedule, control cost and schedule. If the outcome is negative, separate the cause from the team. Use reasons such as shortage of funds, changes in market needs. Be sure you have carefully set up new assignments for the six R&D stars. Another strategy would be to start pulling stars off the project because of urgent needs elsewhere. This might weaken their desire to complete the project if they are needed on projects perceived to have higher priority. The project could be put on indefinite hold. It is important to save face and keep the stars motivated and loyal. Within 6-12 months Set up an integrative project management process which covers mission, priority, scope definition, project schedules and budgets, and control. (This typical statement is usually explained in great detail. Although it is not exciting reading, it is refreshing to see how well students pick up on the connectivity and integration of all the processes!) Set up a review team which periodically reviews projects midway in the project life cycle. Observe the similarity to gating review committees found in the field. Most gating groups are good at closing a doubtful project; they are also very good at finding at finding ways to help troubled projects get back on track. Keep team as independent as possible with no personal interests in the project. Review on a regular basis, including: Classification of the project by type Collected data Recommendations—pros or cons Lessons learned, reported, and achieved Report if organization priorities are still relevant and culture supportive. If the organization is large enough, it is suggested a project office be developed to select and review projects. These responses should not be perceived as an answer; the problem is very complex and multi-dimensional. The authors enjoy starting the class discussion with Olaf’s concerns of “…how to identify projects which need to be terminated, how they can allow good managers to make mistakes without embarrassment, and how they can learn from their mistakes.” This creates a lively discussion. Student responses concerning the issue of saving face for those working on a project that will be terminated are scattered. Class discussion quickly identifies the issue that in some cases the project manager and team may not be doing a good job. Some “punish” syndrome frequently develops. Training seldom comes up in the discussion, but it probably should. At some point it is necessary to get the class to return to a process for identifying errant projects and for dealing with participants of a project which is to be terminated. Next, we divide the class into small groups. They are asked to come up with a detailed plan which can be implemented by Olaf. The outcomes are similar to the written assignment above, but from many viewpoints. (A few PMs in the field have suggested the maturity model be used to assess and analyze the company, which has systemic problems.) The wrap up starts with a question of “Why do so few organizations review projects in process and less than half not review at all?” The usual answers of time, bureaucracy, cost, etc. will come up. We push with further questions. What are firms losing by not reviewing projects? Compare a firm which has a review process versus one with none. Is there a competitive advantage? We conclude with the need for a project review process in small and large firms in which projects represent a significant part of their effort. Small firms may only need a group of two or three people while a large firm may need a formal process. It is important to note that a good review process depends on good processes for setting goals; priorities; project definitions, schedules, budgets, and control; and a supportive culture for project implementation. In all cases, the lessons learned should be archived and available for use by others. It is very clear that more organizations are setting up formal processes to review projects and to enjoy the benefits of lessons learned. Use of retrospective methodology is exploding, especially in global projects. Gating at significant milestones is assisting in identifying project that need to be terminated. Solution Manual for Project Management: The Managerial Process Erik Larson, Clifford F. Gray 9781259666094, 9780078096594
