Do you work in projects, fully or partially? Do you have many projects in your organization? Maybe you also work in one of the roles of project owner or project manager? According to the Harvard Business Review (HBR ), by 2027, 88 million people will be working in project management and leadership. At the same time, projects as a whole are expected to reach an economic value of USD 20 trillion, that’s just over 20 million (20,000,000,000,000) US dollars. To put it in perspective, this is roughly 1,100 times the Swedish state budget for 2025. We can see that it is a lot of money. HBR also shows in surveys that only 35% of projects succeed in achieving their goals. It can be anything from:
- you get less than you expected at the planned cost,
- or you get what you want but at a higher cost,
- or you get less than you expected at a higher cost,
- or the project fails completely, and everything is shut down and the money spent up front is thrown away.
So there is a huge amount of money going into projects that fail. So the upside of having better control in your projects is huge.
The benefits of running projects right are huge
With a little calculation based on the benefit-value analyses that I myself have been involved in over the years, we can calculate that the projects that fail are on average 20% more expensive. This is a rather conservative calculation, but I thought that the precautionary principle should apply here. Let’s imagine that your organization is involved in projects worth 500 million per year.
So what does it mean for your business if we adopt the above figures?
- Of your projects, 35% achieve their objectives, which in monetary terms means that SEK 175 million reaches its target, i.e. the money does the good that the project owner intended.
- The remaining SEK 325 million will not reach the target, but with a 20% increase in costs, they need to be increased by SEK 65 million to get what you intended. So your budget is half a billion and you need to add 65 million SEK to reach your goals.
- Or you can turn the calculation around and say that you get SEK 65 million less value if you choose to keep the budget and instead you completely or partially delete some functionality along the way. In other words, you don’t get what you intended and were prepared to pay for.
And the above calculation is per year. This cannot continue, something needs to be done about it. One way to do something is to ensure that you have a well-functioning project model and that you make sure to train staff in how to use the project model.
Project model? Ugh…
Some organizations have a project model, but they don’t really care about it. It is more voluntary whether you have to follow it or not. The people who care most about the model are the project managers, and that is not enough. Other organizations have a project model and say that it must be followed, but due to a lack of understanding of what the model actually means, it is usually mainly the professional project managers who follow the model. Then they have to chase the other role holders to get them to act as expected. It is not at all unusual for these project managers to end up being the ones who run all the roles themselves. “You are so good, can’t you write the project directive for me,” says the person who should act in the role of project owner, “you know what we should do?”.
For some, everything is a project
Still other organizations misuse the word project and use it for just about anything, where something is to be done that is a little outside the usual work. But they don’t meet the definition of a project, and they don’t give the person they call project manager the right conditions to succeed. Still others have allowed the finance department to get hold of the word “project”, where it exists in the financial system more as a cost center. Costs are entered there, even for things that have nothing to do with actual projects.
To stop this major leak, you need to do something! Project modeling is one thing. Training in the model is another. Monitoring its use and providing ongoing support to those working in projects is a third. You need to make sure that all three work. When it comes to training, don’t forget about staff turnover. It is not enough to hold the training once and then hope it works. You need to make sure you hold training on a regular basis. Both as a refresher for those who have already been trained and work according to your project model. And don’t forget the new employees in your organization.
- Do you not have a project model? Clean Stream can help you develop a well-functioning model for your business. We start from a well-functioning basic model and adapt it to your needs.
- Do you have a project model, but it is not working well? Clean Stream can help you improve your project model, seeing what works and what can be improved.
- Are you missing training on how to work according to your project model, how to manage projects, how to lead projects or how to plan projects? Clean Stream has the knowledge and training you need, both online and in person.
Contact me and I can tell you more. But above all, do something about your projects so you don’t have leaks in your business. If the above example applies to you, imagine what you could do with 65 million a year. I am convinced that it would be transformative for you to have this money for other things.
