Project Recovery 101: Turning Around Failing Projects

When it comes to effective project management, sometimes things simply don’t go as planned. Unexpected challenges, resource shortages, and changing objectives can throw even the best-laid plans off track—but don’t worry—when a project starts to falter, it doesn’t mean it’s completely doomed.

In this article, we’re diving into the art of project recovery. We’ll walk you through a step-by-step approach to diagnosing what’s going wrong, creating a solid recovery plan, and getting your project back on track once again.

Main project issues

When a project starts to go off track, the signs are often visible long before a complete derailment. Of course, the exact list depends on the details surrounding the project, but you’ll mostly notice these six symptoms of project failure:

1. Inability to meet KPIs

When key milestones are consistently not met, it clearly indicates that the project schedule isn’t being adhered to, potentially due to unrealistic timelines, inadequate resources, or unforeseen obstacles.

Constantly missing key project milestones and deliverables is a clear sign that the project is off track. Schedule slippage creates bottlenecks, impacts downstream tasks, and makes recovery difficult.

2. Insufficient funds

Possible budget overruns are another significant warning sign to consider. If the project consistently spends more than planned without corresponding progress, it could indicate poor financial planning, scope creep, or inefficient resource use.

3. Low team morale

This is a more subtle yet equally important symptom to consider. When team members are disengaged, frustrated, or showing signs of burnout, it can severely impact productivity and quality of work. This often stems from unclear roles, lack of support, or unrealistic expectations.

4. Frequent changes in scope or scope creep

Allowing the project scope to expand beyond the original objectives without proper change control is a recipe for failure. Scope creep overburdens the team, blows the budget, and makes it nearly impossible to deliver the project successfully.

5. Strong stakeholder disagreements

If project sponsors are frequently absent, disengaged, or fail to provide the necessary resources and support, the project is at high risk of failure. More often than not, strong disagreements, conflict, and tension also lead to project failure.

6. Poor team communication

Poor communication within the project team and with stakeholders is a major contributor to project failure. When key information is blocked, team members are not on the same page, and issues are not addressed promptly, it leads to misalignment and delays.

A. How to identify project issues

Identifying the underlying issues of a failing project requires a structured approach to root cause analysis.

The 5 Whys method

One effective technique is the 5 Whys method, which involves asking “why” five times in succession to drill down into the core problem. For example, let’s assume a marketing campaign failed because of a missed deadline. The first question is, “Why was the marketing campaign late?”

• Why #1. The creative team did not deliver the campaign assets (images, copy, etc.) on time.
• Why #2. The creative team was waiting on final approvals from the client before finalizing the assets.
• Why #3. The client took longer than expected to provide feedback and sign off on the creative concepts.
• Why #4. The client’s marketing manager, who needed to approve the assets, was out of the office for several days on vacation.
• Why #5. No backup plan or alternative approver was identified in case the primary contact was unavailable.
• Conclusion: The creative team and project manager failed to plan for this contingency.

The process might not be as neat as this example. Continue with the questioning until the root cause is uncovered.

The Fishbone diagram

Another valuable tool is the Fishbone Diagram, also known as the Ishikawa Diagram. This technique helps in mapping out potential causes of problems across various categories such as people, processes, materials, and environment:

• People: issues related to the marketing team, client, and other stakeholders
• Processes: problems with the campaign planning, execution, and approval processes
• Technology: challenges with marketing tools, platforms, and infrastructure
• External Factors: uncontrollable factors outside the campaign
• Communication: breakdowns in communication between parties
• Budget: insufficient budget or financial constraints

Systematically examining each category means that project managers can identify specific areas contributing to the issues.

How a failed marketing campaign is broken down according to the Fishbone diagram

Surveys

Surveys are carefully crafted tools that allow you to take the pulse of a group of people before and after a project. This helps measure intangible outcomes like awareness, attitude, and appreciation. Surveys can reveal if the project achieved its goals from the perspective of participants.

If you’ve experienced employee turnover, make sure you apply an exit survey for the employees who left the company:

Quantitative tools

Quantitative tools measure concrete metrics like how many people attended an event, how many got jobs from a program, or how much grades improved. These include:

• Head counts
• Pre and post tests
• Data analysis on outcomes
• Comparisons to previous periods

Analyses using project management software

Project management software and tools like Gantt charts, Kanban boards, and dashboards can provide visibility into the project status. They can surface delays, budget overruns, and quality issues that indicate the project is failing. Effectively using these tools is key to spotting problems early.

Risk Assessment

Formal risk management processes like risk registers and risk response plans help identify, analyze, and mitigate project risks. Regularly assessing risks can uncover potential issues before they become problems. Failing to assess and manage risks properly is often a root cause of project failure.

These methods encourage a thorough examination of project challenges, helping to pinpoint precise causes rather than just addressing the symptoms you’re encountering.

The key is using quantitative metrics, qualitative feedback, and analytical tools to assess the project from multiple angles thoroughly. This provides the data needed to diagnose the issues and determine the best path forward.

Regularly monitoring the project using these methods is critical to spotting problems early before they spiral out of control.

B. How to create an effective recovery plan 

1. Prioritize the problems

The first step in creating a recovery plan is to assess and prioritize the problems identified during the root cause analysis.

Taking the time to evaluate the severity of each issue carefully involves understanding its impact on the project’s overall timeline, budget, and quality. Some problems may pose immediate risks and require urgent attention, while others may have a more minor, long-term effect.

Involving key team members in the assessment process is important here, as team members often have insights into the practical challenges they face and can provide valuable input on the feasibility of potential solutions.

Once the problems are assessed, they should be categorized based on their urgency and impact. This helps in focusing on high-priority issues first, ensuring that the most critical risks are addressed promptly.

2. Draft an action plan

With a clear understanding of the issues at hand and their respective priority/importance, the next step is to develop a detailed action plan. Each issue should have a specific action plan outlining the steps needed to resolve it, and these steps should be practical, actionable, and aligned with the project’s overall goals and objectives.

Setting realistic and achievable milestones is a key part of this process. These milestones act as checkpoints, helping to track progress and ensure that the recovery efforts are on track. They should be SMART (specific, measurable, achievable, relevant, time-bound). Even refer to your OKRs.

Assign responsibilities for each action item. Clearly defined ownership ensures accountability and helps maintain momentum toward recovery.

3. Start executing

Managing the resources you have effectively is essential for properly implementing the recovery plan, and this may involve reallocating budget, personnel, or materials to areas that need the most attention.

For instance, if a particular phase of the project is behind schedule, additional team members might be assigned to accelerate progress.

Flexibility and adaptability are equally important during this stage, so the recovery plan should be dynamic, allowing for adjustments as new information emerges or as conditions change. Regular reviews and updates ensure that the plan remains relevant and effective.

Engaging with stakeholders to communicate changes in resource allocation helps in managing expectations and securing their support. Maintaining transparency in these decisions builds trust and reinforces the collaborative effort needed to get the project back on track.

Then, you can conduct a project retrospective in which you annotate observations, failures, and core issues in case these might happen in the future. Learning about project failures can help you turn them into fuel during key improvement processes.

4. Realign with project goals

Steadily revisit the initial project objectives.

The original goals need to be reviewed to ensure that they’re still relevant and achievable given the current context. Market conditions, stakeholder priorities, or internal organizational changes may have shifted, necessitating an adjustment of the project’s aims.

If the original objectives are no longer feasible or relevant, they should be redefined. This might involve narrowing the scope, adjusting timelines, or modifying deliverables to better align with the new realities.

The key is to set realistic and attainable goals that the team can commit to and work towards with renewed focus.

Even though Agile processes are usually associated with app deployment and development, traditional teams can learn a lot from them in terms of salvaging lost projects and even nurturing a habit of doing proper project retrospectives, regardless of the outcome.

5. Maintain transparent and aligned communication

Effective communication ensures stakeholders and team members understand the revised plan and new direction. Transparency about the reasons for changes and their benefits helps gain support. Organizing a meeting with key stakeholders allows for presenting revised objectives, addressing concerns, and gathering feedback, fostering a sense of ownership and commitment.

Building consensus is essential for the recovery plan’s success. Regular updates and open communication keep everyone informed about progress and necessary adjustments, ensuring alignment with project goals and maintaining team motivation.

Transparency is vital for managing stakeholder expectations. Keeping them informed about the project’s status, challenges, and progress builds trust and engagement. Regular updates should provide a clear picture of successes and setbacks. Thanks to project management with client portal, stakeholders can easily tune in and keep an eye on relevant information.

Honest reporting and promptly communicating problems help manage expectations and prevent surprises that could undermine confidence. Visual aids like dashboards and progress charts can enhance understanding of complex information.

C. How to monitor the recovery plan

Of course, now you have to keep monitoring the recovery plan.

This proactive project management approach regularly assesses progress towards adjusted goals and milestones. By doing so, it enables early detection of deviations and emerging challenges, facilitating timely interventions.

1. Consistent project monitoring of metrics

Take advantage of certain monitoring tools, such as Gantt charts, project management tools, and time-tracking software, to check on key performance metrics. Not only will you have control over your project, but these can provide valuable insights into how well the project is adhering to the recovery plan.

Here are a few metrics to consider:

• On-time delivery tracks whether project tasks and milestones are completed as scheduled, which is crucial for maintaining stakeholder trust.
• Gross Profit Margin (GPM), which is calculated by the formula GPM = (Profit − Cost)/100. This metric indicates how effectively a project contributes to the organization’s bottom line.
• Budget adherence shows whether the project stays within its planned budget. Regular evaluations help identify any necessary adjustments to avoid overruns.
• Return on Investment (ROI) measures the financial return relative to the project’s costs, calculated as ROI = (Net Benefits/Costs) × 100. It assesses the overall value generated by the project.
• Customer Satisfaction Index is often measured using the Net Promoter Score (NPS); this metric gauges stakeholder satisfaction and helps identify areas for improvement.
• Cost Variance (CV) compares the budgeted cost of work performed to the actual cost, helping to identify any discrepancies early on.
• Schedule Variance is similar to cost variance, and it assesses the difference between the planned schedule and the actual progress, indicating whether the project is on track.
• Burn Rate measures how quickly project funds are being spent, providing insights into financial health and sustainability.

Additionally, explore these 16 KPIs within project management and see which works in your case.

Example of a Net Promoter Score.

2. Make adjustments based on feedback

Making necessary adjustments based on insights is a key element in achieving project success. If progress is slower than anticipated or new challenges arise, the recovery plan should remain flexible to accommodate changes

Regularly scheduled reviews and status meetings can help assess the project’s current state and identify any required course corrections.

Establishing robust feedback loops supports continuous improvement and effective project recovery. These mechanisms foster a culture of ongoing feedback from both the project team and stakeholders, ensuring that concerns or suggestions are promptly addressed.

Regular team meetings, stakeholder check-ins, and surveys are effective methods for gathering this feedback.

Encouraging open and honest communication within the team aids in identifying potential communication issues that may not be immediately visible through monitoring tools alone.

Stakeholder feedback also provides an external perspective on the project’s progress and alignment with their expectations.

3. Focus on restoring confidence

Restoring stakeholder trust after a project has gone off track requires a deliberate and thoughtful approach.

One effective strategy is to demonstrate quick wins since by achieving small yet significant milestones early in the recovery process, you can show tangible progress and rebuild trust. These early successes serve as proof that the recovery plan is working and the project is moving in the right direction.

Consistent and positive communication is also essential to maintain throughout the process here. Regularly scheduled meetings and updates help maintain a steady flow of information and mitigate any communication issues that might arise.

During these meetings, emphasize the positive aspects of the recovery efforts without downplaying the challenges. Highlighting the dedication and hard work of the team can also boost morale and stakeholder confidence.

Likewise, being responsive to stakeholder concerns helps in building a collaborative relationship and further strengthens trust.

Get your project back on track

Turning around a failing project is no easy task, but with the right approach and team in place, it’s definitely doable.

By pinpointing the root causes of your project’s problems, crafting a solid recovery plan, realigning project goals, and keeping communication open and honest, project managers can tackle even the toughest setbacks.

Engaging in continuous monitoring and having feedback loops help keep everyone on track and ensure the plan stays relevant.

Effective stakeholder communication is key to rebuilding trust and confidence, making sure everyone is on board and moving in the same direction. Each challenge faced and overcome not only saves the project but also strengthens the team’s skills and resilience for future endeavors.

Remember, every hurdle you face is a chance to learn and improve, turning potential failures into opportunities for success.