Navigating Project Selection and Execution for Competitive Advantage

A Guide to Evaluating Prospective Projects at the Idea Stage

John E. Triantis, John Triantis

• Publisher: Productivity Press
• Year: 2021
• eBook ISBN: 9781000406894
• Edition: 1
• Topic: Business
• Subtopic: Business Law
• Index: Business

For many organizations, the way in which processes and projects are selected and executed is a fundamental factor in how well they can prosper in today's marketplace. By improving efficiency, driving productivity and reducing costs, organizations can increase throughput, improve service and bring new products to market faster.

The aim of this book is to show how to assess chances of project success at the idea stage in order to direct resources to promising projects and conserve resources. In doing that, it presents effective project execution processes, practices, and experiences that help to select the right projects and do them right. This is a mindset changing book from project speed and cost cutting to discipline, execution excellence, and competitive advantage. It is about effective business development using a practical approach to select the right projects and do them successfully. It describes how to evaluate and predict the likelihood of project success at the idea stage before resources are expended to develop projects. Each chapter describes how to evaluate planned project development and implementation, rate its performance, and identify gaps to be filled to achieve project execution excellence.

The book is designed to guide the assessment of each project stage to uncover areas in need of improvement with focus on prediction of project success. Hence, each chapter stands on its own and assesses key elements of project stages to determine how well they are executed. The journey of project execution described is based on predicting project success at the idea stage and begins with understanding differences in large project requirements and their effects on the way they should be done. The evaluation of the idea's origin and reasons for pursuing a project is done with help from an experienced facilitator/moderator. The reason for it is that this individual is engaged to assess likelihood of success from an external, independent, critical, and objective perspective before the project begins.

PRECURSOR

I

Chapter 1

Introduction

Why is not it possible to assess project success at the idea stage? Decision-makers ask this question and seek answers because they realize the importance of knowing the chances of project success and making the right decisions. It is possible but is a complex question to answer unless a thorough assessment of the planned approach to project execution is performed. It is difficult to answer convincingly because, in their minds, the reasons for project success or failure are known to sponsors and project managers and yet failures occur regularly in various degrees.

Projects start with promising ideas, good intentions, pledges and assurances of cooperation, and support from stakeholder organizations. However, projects fail, human capital is misdirected, and financial resources squandered. At the advancement of a project idea, it seems that failure is a remote possibility and it does not make much difference what type of project idea is advanced. Projects go through various types and quality of assessments, resources are expended and investments made, and projects get implemented one way or another. Success is judged on the basis of various measures, but when project net present value (NPV) is used, reality sets in and leaves senior management deeply disappointed. They are concerned about the lack of skills and capabilities to shape ideas into good projects, bring them to fruition successfully, and create expected value. Frustrations and finger pointing then replace pledges of support and cooperation.

In every industry, project ideas considered promising at the outset end up in poor or failing projects and the question is why? We have found in such cases that important elements determining and predicting success are not considered. That is why, in addition to usual enabling success factors, we address assessments that are usually bypassed. The premise is that a skillful evaluation of factors that produce project success vis-à-vis benchmarks and best practices enables experienced managers to make reasonable predictions of the project idea’s potential to become a successful undertaking.

Experience suggests that project failures can be minimized or prevented by correctly evaluating chances of project success at the idea stage. How can that be done? By assessing gaps in resources, competencies, execution processes, and practices against benchmarks and best practices. Hence, this book is about assessing project success at the idea stage. Projects in this category include both private and public sector undertakings: Major corporate strategy changes, new product development, new foreign market or business entry area, mergers and acquisitions and joint ventures, licensing, portfolio adjustments, and reorganizations. Other large expenditure projects include economic, social, and military infrastructure projects.

Arriving at an estimate of project success likelihood, assessments are made to determine factors at and beyond the idea inception stage that govern project success which provide guidance on how to proceed. The options must be evaluated carefully: Proceed with the project idea as is, restructure the project idea, outsource its execution, or abandon the project entirely. Project success estimates may not always be precise for every project stage, but the approach we introduce provides guidance on how to do it right. When followed, it leads to the effectiveness of resources and capabilities, preserves scarce resources, and increases the project value. If performed skillfully, this approach leads efficiently to well-founded decisions and creates the conditions for attaining competitive advantage.

A starting point to assess the likelihood of project success is awareness of the decision-making context shown in Figure 1.1, which provides a basis to understand decision-maker concerns of forces at play and provides insights into assessing proposed project ideas. This context is beneficial because it considers organizational, personal, internal, and external factors, all of which are interrelated. These factors ultimately determine the chances of a project idea’s success.

Figure 1.1 The Project Decision-Making Context

1.1 Objectives of the Book

Predicting the future is a precarious business and knowing that, selective and eclectic approaches are introduced, some of which are supplemented with the RBV/VRIO framework to assess company resources and capabilities which help toward achieving competitive advantage. Why and how is that possible? It is because if the assessment affirms their presence to sufficiently high levels, it indicates the capacity is there to transform the idea into a project the right way. If, on the other hand, the sufficiency of resources and capabilities are lacking, project success is questionable and decisions are made to restructure or abandon the project right from the start. At this juncture, the question is how can a range of project chances of success be predicted at the idea stage. This is what the book is all about. To appreciate the effectiveness of our approach, the treatment of this question is deferred until after the evaluations of each project phase are concluded.

In large projects, one of the difficult tasks is achieving alignment and coordination of various factors that affect performance. The primary objective of the book is to show how to apply principles, processes, and techniques of new business development, project structuring, and execution to evaluate the presence and degree of conditions favorable to project success. The resulting products are assessment methods predicting the likelihood of project idea success at its pre-feasibility study, before large expenditures are incurred. If the assessments are positive, focus and valuable resources can then be fully directed to the opportunity presented by the proposed project idea.

Definitions: RBV stands for Resource-Based View, which is a good approach to assess company resources and capabilities to create effective strategies and create or select the right projects to strive for, and to create or maintain competitive advantage (Sheehan and Foss, 2007).

VRIO is about valuable, rare, non-imitable, and organizational ability to exploit its resources and capabilities to create competitive advantage. It is a way to develop strategies, methods, and implements to uncover, identify, determine, evaluate, protect, and enhance company resources and capabilities (Barney, 1991).

A major objective is to present well-structured and disciplined methods to determine chances of project success early on and show how to use that intelligence to determine idea and organizational strengths, weaknesses, and gaps to be filled. The methods presented enable project teams to:

1. Verify if prerequisite conditions for project success are satisfied before the feasibility study

2. Assess and rate the ability of the project team to deliver sound analyses and evaluations in each project phase

3. Outline an approach to create a better project idea composition, execution processes, and develop required skills and competencies

4. Use the knowledge obtained to make changes and determine how well the project is likely to be executed successfully.

Methods are presented along with a discussion of process and factors to investigate and know how the assessment of success likelihood can be carried out to ensure major decisions are fact-based, balanced, and well-considered. In the process of assessing the conditions and likelihood of project success at the idea stage, ample support is presented for the benefits of the approach introduced and why it should be used in public and private large investment projects. A byproduct of this approach is ability to identify current or potential sources of competitive advantage to be created or enhanced. After enabling factors that support the project idea are identified, recommendations are made on how to proceed with the project idea.

1.2 Principle of Assessing Likelihood of Project Success

There are different methods to evaluate whether project ideas will be successful, but they emphasize the project management aspect and always measure value creation by project NPV. Better prediction results are obtained by assessing and rating potential for project idea success of processes, capabilities, objectives, and plans for each project stage. How can that be true? It is true because NPV estimates are not based on realities of the project context, but on dated information, scenarios, and intervening adjustments, all of which make them unreliable. They are also unreliable without confirmation of required skills and competencies to execute projects successfully.

Assessing chances of a project idea’s success at the starting stage, first of all, requires a clear organizational strategy, definition of the project idea transformation objectives, and measures to assess success. It requires evaluations performed by an independent, critical, objective, and preferably an external party with no vested interests and preconceived notions. It also requires close observation of organizational, cultural, project execution practices, and skills and competencies. Then one can determine the effects of enabling and detracting factors, how things get done and why, and obtain estimates of the chances of project success.

The end result of assessing project likelihood of success at the idea stage is shown in Figure 1.2. It summarizes our approach and sketches out an abbreviated version of the methods used to predict chances of project idea success early on. The value of this approach is the clear guidance it provides to decision-makers on how to proceed with the project once assessments are completed. Details of this and other approaches used to predict success are discussed in Chapter 20.

Figure 1.2 The Value of Assessing Project Success at the Idea Stage

1.3 Challenges of Assessing Project Idea Success

Good projects come from good decisions and good decisions involve a number of well-known factors, which are outlined in Figure 1.3 and are addressed in the following chapters. They include the right idea, motives, and project objectives in concert with corporate strategy and a clear definition of the project scope. Because these factors and stakeholder experience, skills, and competencies are often missing, it is necessary to confirm their existence. Even worse is questionable sponsor and project team integrity and ability to pick, develop, and implement well the right projects.

Figure 1.3 Assessment of Project Idea Success Factors

There are unknown factors at the idea stage that present barriers to assessing project success and include practices we address, such as lack of concentration of effort and willingness to follow tested processes and use of performance benchmarks and best practices. Effective project management throughout the project idea stages with project executive commitment and senior management support go without being confirmed. Also, deficient internal and external environment assessments are given light treatment or are ignored. The absence of relevant, realistic, and appropriate success measures for project stages, participant, and decision-making purposes make it difficult to manage stakeholder expectations. These practices result in an inability to use the project context’s information to identify factors that detract from or boost chances of project success.

Besides the factors shown in Figure 1.3, we are mindful and alert the reader that there are several challenges facing a project manager’s job. Despite challenges in assessing likelihood of success, our approach helps deal with them effectively. A major issue is establishing that the right idea has been selected to transform it into a value creation project. Determining what constitutes project success and how to measure its value to the organization on an ongoing basis is a problem we help to resolve. Furthermore, assessing the ability to predict company responses to competitor reactions affecting chances of success under changing environments and unforesee...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Contents
• Preface
• Acknowledgments
• About the Author
• Part I: Precursor
• Part II: Analytics and Assessments
• Part III: Main Areas of Attention
• Part IV: Validations and Verifications
• Part V: From Plans and Evaluations to Action
• Part VI: Performance Evaluation
• Bibliography and References
• Index