How Starting a Project on a Bad Note Impacts an Organization?

Project failure is defined as either delivering late, or delivering with too many issues or delivering somehow but with abysmally low profit margin (or even at a loss, at times).

Failures happen too often in project-based companies that need to bid against the others in the fray.

The lowest bidder gets the preference assuming it is at par with others in respect of technical and other considerations. The company may win the bid but ends up loosing money eventually.

The above is a result of the winner's curse.

Bidding involves sales teams whose only motivation is to bag an account. So they may undercut the real estimates by making wayward assumptions related to actual execution capability.

The person handing the execution may be incompetent in not knowing when the execution capability, work estimates and customer commitments are grossly off the mark.

Also there may be organizational dynamics where the execution lead is not able to push-back the sales lead.

Starting a project on a bad note means one or more of the following:

• People with needed skills and competences are either not available at all or in the right numbers
• Estimates are too aggressive and not based on correct set of assumptions
• Commitments made to the customer are not grounded in reality
• Organization is forced to accept any and every work even when it lacks the execution capability
• Execution arm of the organization is forced to take up work as they are weak as compared to the sales arm

Starting a project on  a bad note may prove to be disastrous for any organization.

It may lead to major losses on account of such projects and erode its overall profitability.

Here are some ways it impacts an organization:

• People are forced to take short-cuts and may not follow defined processes
• People would indulge in blame games within the project team and with the others outside
• Sales and execution arms remain at loggerheads throughout the project
• People have to work much harder than usual to cover-up for  the follies committed before the execution kicks in
• People are assigned to project even if they do not have the required skills and competency
• Skills and competency enhancement exercise is carried out in a fast-track mode which is generally not at all effective
• People are told to get things done, somehow and due to excessive pressure some of the team members may even leave mid-way
• Management starts demanding more and more data and reports from such a project which puts additional burden on the project team
• If and when the project is able to get the delivery done there may be congratulatory email from the big-shots who only created the mess in the first place
• And finally, such a project becomes a natural choice for the best project of the year! 

Such a project getting the best project award is an absolute irony.

The best project award is supposedly given to recognize the project team's commitment but is actually meant to cover-up the incompetence and lack of systems approach at the management level.