How Project Managers can Assess the Vulnerability of their Projects to the Slow Pace of This Recovery

The Recession that Will Not End.

It is becoming clear that the United States and Europe are finding it increasingly difficult to recover from the most severe recession since the Great Depression of the 1930s.  Precipitated by the collapse of the credit markets, it is apparent that few industry sectors have escaped.  Some have suffered more than others, but almost every sector has been affected.

Even now, more than a year after the recession reached crisis levels, the signs are still troubling. Home sales in the United States have stalled and real estate prices continue to fall; unemployment, near ten percent, shows no sign of recovering in the near future; banks are still reluctant to loan money to businesses; and the automobile industry continues to limp along.  At the bottom of all of this is consumer confidence. People are unwilling to spend and go into debt; they continue to tighten their belts.
 
The good news, however, is that the crisis … especially the financial crisis … has passed, but the bad news is that the recovery will be painfully slow and will continue to take its toll on businesses and especially on existing and proposed projects.  

Indeed, project sponsors and project managers will continue to find themselves defending their projects.  For at least the next two to three years projects will be scrutinized as never before!

Rather than waiting for top management to ask the tough questions, it may be more appropriate for project managers to take a proactive stance and schedule regular comprehensive audits.   Only through a comprehensive audit can the vulnerability of a project be determined.  But more importantly, a comprehensive audit can provide the insight for mid-steam corrections that can prevent a project from becoming the victim of tough times.
 
However, the comprehensive audit we undertake during this unprecedented slow recovery should be different from the audits undertaken during more prosperous times.

Project Review.  

Here are some suggestions for the audit.
•    Have you talked to the marketing department recently? What are the chances that this anemic recovery will lead to marketplace changes that will affect the support for your project?
•    How are other firms in your industry responding to this slow recovery? Are they continuing to cut budgets and circle the wagons?
•    Look back into the history of your own organization. How have they responded to previous periods of uncertainty and crisis?
•    How has top management’s support for the project changed?
•    Take at close look at the business goals of the project. If they aren’t clear to you, if they aren’t clear to top management, if it is doubtful that they will clearly contribute to the bottom line, then the project may be at great risk.
•    What about project performance until now? Has the project suffered budget overruns or scope creep?  Have requests been made to change the schedule or add additional resources?
•    Don’t forget morale. When morale falters, motivation and productivity also suffers. How has morale change in recent months?
 
By answering these questions in an objective way, you will gain a better understanding of how market and organizational forces could affect the vulnerability of your project.  But the most important point is that by understanding these areas of vulnerability you can take the right action to minimize the chances that your project will become another victim during these challenging times.

@2010 Barry Shore Ph.D.

<< Back to Project Tips