Identifying and Acting on Early Warning Signs in Complex Projects

While some project managers may experience a “gut feeling” about impending problems during a complex project, most acknowledge that they’re not very good at detecting or acting on these early warning signs.

Researchers Terry Williams, of the University of Hull, UK; Ole Jonny Klakegg, Norwegian University of Science and Technology; Derek Walker, RMIT University, Australia; and Bjørn Andersen and Ole Morten Magnussen of SINTEF, Norway have examined how project assessments and stage‐gate models can be used to identify and act on early warning signs.

Early warning signs can be simple, such as missing information/numbers or a lack of documentation. They can also be less obvious, such as people in acting positions without authority; project teams that rely on others to fix problems; team members who work too much or too little, contractors unfamiliar with the domain, lack of commitment to make decisions, lack of trust, and continually unfulfilled promises.

Project assessments comprise all types of appraisals and examinations of project documents and practices in order to support decisions, learn from experience or ensure that expectations or formal criteria are met. Stage‐gate models use reviews and decision points during the project lifecycle to determine early warning signs.

The researchers first reviewed a selection of public‐and private‐sector governance frameworks to determine how frequently such project assessments occur, and what the guidelines prescribe as good practice. They then interviewed 14 experts about their experiences of governance frameworks, assessments and early warning signs. They also interviewed key people in eight complex business cases, from both private‐and public‐sectors, in three countries (the UK, Norway and Australia).

The researchers’ goal: to get closer to the reality behind current practices and discover whether project managers actually act upon early warning signs identified during project assessments.

The researchers found that all of the organizations studied did apply a range of formal assessments during the project life cycle.

While project assessments are useful in identifying early warning signs related to the formalities of a project, the researchers found that as a project’s complexity increases, assessments become less useful. Complex projects, they say, are dependent on a project manager’s “gut feeling” about early warning signs.

Everyday communication and the work situation can be better at identifying early warning signs, they say. They also cite several barriers to detecting early warning signs from assessments. These include:

Optimism bias in underestimating costs and overestimating benefits.
Organizational complexity.
No clear strategy or no ability to clarify and resolve conflicts related to goals and strategies.

Pre‐assumptions in the assessment process, which prevent an openness to early warning signs.
Selecting areas for focus in gateway reports may hide signs of problems.
A belief that project assessments will capture all problems.

“In practice, we need to consider such barriers when implementing governance frameworks and project assessment methods to improve performance,” says Williams.

As well, Klakegg notes, “Stage‐gate assessments that are anchored in established governance frameworks are limited in their ability to pick up early warning signs. They have an implicit focus on some issues, for example risks, progress and financial development, but ‘turn a blind eye’ to other issues.”

The research also revealed two important reasons why project managers can fail to react to early warning signs:

The project is too large for the governance structure.
Politics. Political agendas may assert pressure to adopt particular solutions or priorities while overlooking early warning signs.

While many organizations attempted to learn from previous projects, they rarely learned from those lessons. The main challenges, say the researchers, seem to be within the minds of the project team members, who say they:

Lack time to think about the critical issues.
Lack time to prepare ‘lessons learned’.
Are reluctant to air ‘dirty laundry’.
Are not motivated to learn from previous projects because the current project is ‘unique’.
Can’t learn from reports that too often contain insufficient contextual information.

Additional roadblocks to learning from previous projects can include group thinking, a culture of blame, and power effects.

So what do project managers need to change in order to improve on identifying early warning signs?

Hold assessments earlier in the project, when real options are still available. Ask critical questions about needs, objectives and assumptions before all the facts are at hand.
Dialogue and organizational culture can play a key role in acknowledging and fixing issues related to “gut feelings”.
Instead of increasing the number and frequency of formal assessments for complex projects, rely more on “gut feeling” approaches.
Use an outsider’s view, be anchored on a high level in the permanent organization, and look for inconsistencies to detect lack of trust, lack of clarity, and misalignment between qualitative and quantitative analysis.
Understand the cultural conditions around and in the project, such as those that that impede openness or that focus on blame instead of problem solving.

About the Author

Source: Williams, T., Klakegg, O. J., Walker, D. H. T., Andersen, B. and; Magnussen. O. M. “Identifying and Acting on Early Warning Signs in Complex Projects”, Project Management Journal, 43:2, April 2012, pp. 37–53.

PMPerspectives.org is a website which connects project managers and sponsors with project management researchers. Our mission is to understand and improve project management practices. The research team comprises Dr. Blaize Horner Reich and Dr. Andrew Gemino from Simon Fraser University, Canada and Dr. Chris Sauer from Oxford University, UK.