Here is a stat that raises some eyebrows: According to Gallup, we waste $140 billion on saving technology projects every year in the US. Many Leaders intuitively recognize this lack of success in their professional spheres, especially in legacy organizations, but they fail to grasp its sheer scope. What causes this frightening statistic in organizations across industries year after year?
The last two decades have ushered massive digital transformation efforts across the entire spectrum of businesses and government entities and prompted unprecedented innovation. The last twenty years have also shown in enhanced processes and updated certifications surrounding projects and development efforts: Agile, Scrum, PMP, etc., the list is vast.
Despite an explosion of value-driven innovation and project standards development, the percentage of successful projects has hovered between 30 percent to 39 percent over the last two decades. According to The Standish Group’s 2020 CHAOS Report, most recently, only 31 percent of projects are successful. Only 32 percent of projects deliver a higher return on value to the organization and a satisfactory result to the project’s internal & external customers. After twenty years of innovation, low project success is still the primary locus where the needle has not moved.
If So Many Initiatives Fail, What Next?
How do these efforts continue to go awry, seemingly forever, despite all our advancements in technology? Why even proceed with an initiative not set up to deliver value to the organization and satisfy its stakeholders? As initiatives focus on IoT, AI, Machine Learning, Cybersecurity, and other improvements rely on increasingly complex technologies and large-scale organizational change; it is even more critical to ensure a proper foundation for success to de-risk these efforts as much as possible from the ground up.
When surveyed by The Standish Group as to why projects did not succeed, most IT executives cited issues related to inadequate requirements definitions as the primary culprit for project failure. In contrast, issues related to saving tech projects ranked far lower at the bottom of the list. Simply put, project failure is not a technology problem. It is a requirements problem.
What creates better requirements? Better requirements lead to better outcomes: If you do not set up the dominoes correctly in the beginning, the dominoes down the line will not fall as desired. Since the requirements problem is the tip of a significant iceberg, let us mix our metaphors and briefly look below the waterline.
If strategic execution is an iceberg, the quality of requirements is visible just above the waterline. Beneath the surface lies the unseen strategic execution connected to it.
Alignment and Developing Better Requirements
To develop better requirements that lead to better outcomes, requirements must consistently satisfy the needs of the initiative’s Stakeholders while also addressing the strategic priorities of Leadership. Therefore, the first layer of the iceberg under the waterline is definitively ensuring alignment between the strategic importance of Leadership and the project’s stakeholders’ needs. We must consider all stakeholder groups, not just the ones that Leadership assumes to be the stakeholders.
This alignment between the strategic priorities of Leadership and the project’s stakeholders’ needs can drive suitable projects and better requirements to create innovation. The initiative creates new value by reaching better outcomes that serve the organization and its customers. This, in turn, de-risks initiatives, delivers a higher return on value to the organization and meets the needs of each stakeholder group.
Ensuring better strategic execution throughout an initiative is a complex and multi-faceted process, which warrants a deep dive and new methodologies that many organizations have either missed entirely or struggled to put into practice. As we dive deeper into this topic, we will discuss the strategies, applied research, and tactics that organizations can adopt to ensure better strategic execution throughout the lifecycle of their initiatives.