Large projects require the participation of multiple functions, each of which may have a distinctive culture. Coordinating work in a cross-functional, multicultural environment is extremely complex, and this complexity makes it hard to manage tradeoffs and align on priorities. Also, the challenge of mastering new technologies can worsen the coordination problems. In many cases, frontline teams respond to inadequate central coordination by pursuing their own work plans—and by keeping bad news to themselves.
Managing tradeoffs in decision making is especially difficult in a large project with complex objectives and multiple stake-holders. The complexity of programs makes it difficult to identify the tradeoffs among options. Even when tradeoffs have been clarified, organizations often lack a system to ensure that the appropriate organization layer is able to rapidly make decisions to manage them.
For example, in some projects, the program owner provides design specifications to a manufacturer and then requests changes. However, the owner may not fully understand the interdependencies among design requirements or how changes may affect procurement, construction costs, and schedules. If requested changes are few in number and minor, frontline teams typically accept all of them. But an accumulation of changes is certain to lead to budget overruns. The same is true for a major change. The best course of action in response to repeated or major design changes is to temporarily stop work until the new design is finalized. If the project continues without a finalized design, time-consuming rework will likely be required.
At one project, the owner requested a major design change but also said that the work should proceed without delay in order to meet an upcoming milestone. To make matters worse, the owner’s requested change was not communicated to the frontline. Although the project reached the milestone, the construction company had to redo a considerable amount of work once the design was finalized. The need for rework led to even greater delays in the overall project schedule.
Aligning on Priorities
The priorities of the project management organization (PMO) may not match those of the business units implementing the project. Most notably, it is hard to develop a master schedule that is agreeable to all units and then to make adjustments when delays arise. (See “Why Schedules for Large Projects Shouldn’t Include Dates,” BCG article, June 2016.)
Because the business units have authority over personnel, the PMO’s decisions, which reflect its priorities, often are not implemented. In one project, a unit general manager continued to supervise workers, even though he was not involved in decision making at the project level. Because the project manager had to take the general manager’s feelings into account, central coordination and decision making became even more complicated. In some cases, the top managers responsible for coordinating decisions fall into the trap of prioritizing the areas in which they or the most influential stakeholders have the deepest expertise. For example, decisions may be optimized to suit the objectives of the manufacturing function, rather than those of the overall program.
The technological complexity of large-scale programs has increased markedly in recent years. Project managers often must make judgments on technological issues that are beyond the scope of their past experience or knowledge. In one typical situation, a project manager lacked the capabilities to use the latest software in the design and manufacturing phases. Additionally, the project manager significantly underestimated the volume and quality of resources required to apply the new technology, which led to major cost overruns and delays in project progress.
Managing the Consequences of Ineffective Coordination
The problems that result from the issues described above make project management even harder. For example, because they lack authority to resolve the cross-functional issues that inevitably arise, frontline teams tend to optimize operations in their respective areas, and they tend not to communicate with other areas as freely as they could. As a result, the difficulties of coordinating work intensify.
At one large-scale construction project, separate teams were responsible for laying pipes and electricity lines. Initially, the teams succeeded in coordinating their efforts to meet daily milestones. However, the project started to fall behind schedule and conflicts arose between the teams as each sought to catch up to its goals. The failure to coordinate the work worsened the delay in meeting the milestones.
Inadequate central coordination also leads teams to set their own schedules. Project managers often coordinate schedules across business units without explaining to each unit the underlying dependencies that are the basis for the schedule. In such cases, units may make incorrect assumptions about the dependencies that affect their work, or they may not grasp the importance of strictly adhering to the coordinated schedule. Often, units assume that the prerequisites for their work will be completed much sooner than is actually the case.
Given the complex interdependencies in large projects, each unit is likely to be forced to delay its work because of a delay by another unit. When a unit repeatedly faces delays beyond its control, it may lose faith in the schedule and abandon the mindset that strict compliance is achievable. Even when a unit should accept responsibility for project delays, it may be tempted to assign blame elsewhere. In the worst cases, a unit might not make its best efforts to adhere to the schedule, such as by increasing resources, because it doubts that other units can adhere to it. More often than not, the problem underlying the delays must be solved in the next phase of the project.