Living in a VUCA world
The acronym VUCA (Volatile, Uncertain, Complex and Ambiguous) has never been more relevant than in the last two years.
Organisations have had to adapt to new complexity and ambiguity from the disruption to the global economy and traditional ways of operating caused by the COVID-19 pandemic. There’s still uncertainty surrounding COVID recovery and the lasting impact of its disruption. But, with things starting to return to normal, many organisations are now planning to deliver their strategic goals and objectives. They need to be especially careful in the VUCA world.
Projects and programmes help organisations achieve those goals and objectives – for example, according to the national audit office, 95% of government policies are delivered through major projects. And now projects that were put on hold are coming out of hibernation. One of the key lessons we learned during the last 24 months is that organisations must be able to control their business more effectively – especially their strategic projects and programmes.
This is no time to return to the old ways where organisations waste millions on projects and programmes caused by ineffective management control. Before the pandemic, organisations wasted an average of £114m for every £1bn spent on projects and programmes due to poor project performance according to the project management institute (PMI) pulse of the profession 2020 survey. In the UK it was even higher than the global average: £130m wasted for every £1bn spent. With the economy still weak, organisations simply cannot afford this level of waste – especially not on their most important projects and programmes.
Avoiding financial waste through enhanced project controls
So what’s the answer to avoid waste? Organisations can avoid poor performance and financial waste in their projects and programmes by setting up a well-designed and intelligent project control environment, supported by the right behaviours and culture. This makes sure projects succeed. By applying management and technical processes and measures to projects and programmes, you can identify the challenges early, then manage and mitigate them.
Research by Pollack and Adler shows that organisations with effective project control skills have a 75.5% chance of increase in profitability compared with organisations without them. But if project controls aren’t carried out consistently and designed intelligently, they won’t be effective. Organisations that don’t take project controls seriously and have inadequate tools and processes for project control will see even the smartest professionals struggle.
You don’t just need the right processes and tools, you need an environment that enables them. This means developing a culture that makes governance and adherence to project controls not the business of a single function but the business of, well, the whole business. Your project control regime must consider the requirements and needs of the people who will be implementing it. And alongside this, you must enhance your staff competency and organisational capability through training, mentoring, role modelling and continuous improvement.
Other benefits to enhanced project controls
Effective project controls help save costs and improve your return on investment. When deployed consistently using leading practices, project controls can improve your margins, increase your visibility of financial performance of projects and programmes to allow for the development of mitigation plans to improve the financial performance of poor performing projects, make it easier to predict how long projects will take and how much they’ll cost, reduce costs, and give you a competitive advantage over organisations with less mature project control capabilities.
In addition to these strategic benefits, effective project control is also beneficial at an operational level. For example, it makes sure your progress is orderly and structured, ensuring projects and programmes stay on time and on budget. It also helps you use your resources more effectively and fix issues before they turn into problems. And in your wider organisation, successful projects mean happy stakeholders and satisfied clients, ensuring repeat business, higher turnover, and greater profitability.
To learn more, download our bespoke project controls assessment digital tool brochure and latest effective project controls thought leadership.
Dr. Andrew Yakubu Olawale