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(originally published by Booz & Company)


The Long-Term Damage from Juggling Too Many Projects

Taken together, these effects “exacerbate schedule pressure in a self-reinforcing vicious cycle,” the authors write, “generating a persistent steady state that degrades the organization’s long-term performance in terms of its capability to deliver projects efficiently.”

The interviews with the company’s managers revealed they were aware that a schedule-driven management policy could harm the company in the long term, and confirmed that the authors’ simulations jibed with their experience. But “conventional wisdom has been inadequate to talk top management out of deep-seated practice,” the authors write.

The authors caution that the best practices in single-project management, notably up-front planning, can have limited benefits when top managers ignore the harmful long-term effects of systematically “hijacking” resources from concurrent projects.

“A badly implemented schedule-driven project management policy can lead to disenchantment among project staff,” the authors write, “who, disheartened with (and powerless to change) top management’s attitudes[,] have no choice but to get accustomed to reactive but ineffective project management practice.”

Companies should be wary of rewarding top managers on the basis of their ability to implement short-term fixes regardless of their negative long-term impact on the company’s performance, the authors write. Instead, multi-project organizations should put in place rewards and incentives that ensure managers take a holistic view. This means understanding the importance of negotiating project budgets and allocating resources within planned timetables that don’t push back new projects.

The results also suggest that top management should work hard to keep some specialized resources available at all times in case of emergencies. As with “investments in product flexibility...organizations ought to frame an investment in free resource capacity as acquiring an insurance [policy] against future eventualities,” they write. “This investment will then pay off whenever a critical project [comes] unexpectedly under schedule pressure.”

Otherwise, the authors warn, organizations can get trapped in a “firefighting mode” whenever teams fail to spend time up front agreeing on parameters, discussing uncertainties, and planning ways to reduce risk. Constantly putting out fires in the production chain, they write, can become a “self-reinforcing phenomenon when teams are kept overloaded.”

Bottom Line:
Faced with deadlines and working on multiple projects, firms often shift resources among teams so they can deliver slow-moving but important projects on time. This schedule-driven product development strategy is detrimental in the long term, however, as the effects of continuously shifting resources among fluctuating projects degrade a company’s ability to meet deadlines reliably.

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