Projects + Management = Project-Management

Drummond, Helga: Are we any closer to the end? Escalation and the case of Taurus; in: International Journal of Project Management, Vol. 17 (1999), No. 1, pp. 11-16.
http://dx.doi.org/10.1016/S0263-7863(97)00074-4

The Taurus Project is a great case study. First of all it is a failed IT project. It took the project some 500 million GBP and 5 years to fail. And secondly it was a visionary project overhauling the IT of the London financial market. Drummond examines the route to failure. In this article she applies Escalation Theory aka Escalation of Commitment or the Vietnam War Syndrome as it was labelled in Freakonomics.

What did Drummond see? A destructive progression, i.e., one sub-optimal decision leading to another sub-optimal decision, that leading to another sub-optimal decision and so on. This effect was reinforced by an effect first found by Kahnemann & Tversky. They showed that gradual deterioration in a condition is usually underestimated and goes unnoticed. [Therefore addicts need an intervention]

What are the lessons learned?
Avoid the Garbage Can Effect. Don’t let the solution dictate the problem. Especialy if you have a keen vendor.
Make progress tangible. On Taurus experienced managers where struggling with controlling and managing the project because progress in IT systems‘ development can not be touched.
Engage in Second-Order Thinking. First-order thinking is solving the problem with the usual problem solving patterns, aka ‚more of the same‘. This does not help in deteriorating conditions. To break that vicious cycle second-order thinking is needed, which basically examines the assumptions of given decisions, plans, requirements, solutions.
And lastly balance power and responsibility. Politics and outside over steering destroyed the power and responsibility balance in this case. Project Managers had huge responsibilities but no decision power whatsoever to really solve the problem. Even if they saw recognised the problem and asked for project cancellation earlier than it was acknowledged by the project board.

This entry was posted on Dienstag, Juli 8th, 2008 at 09:20 and is filed under Actuality Research, Case Study, Critical Success Factors, Failed Projects. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.