Early warning signals in project management

Revision as of 21:15, 28 September 2015

Abstract

Despite the use of numerous methods and tools for ensuring the success of the development in a project management, still a large number of construction projects experience failure or critical situations. During the front-end stage project, a constant uncertainty last in all critical decisions and corrective actions to reduce possible undesirable impacts to the project.

Identify early warning signals in the early stage is important for the project success, in order to have more time for take corrective actions before negative consequences and problems occur.

An early weak signal can be a missing project information, lack of documentation or the typical wrong scheduling of activities and allocating workers. Due the level of uncertainty at this stage is not easy to identify early warning signals of potential problems that can arise during the development of the project. Nevertheless, select the right approaches for indicate the signals will aid the managers to take right decisions. Furthermore, weak signals can became stronger if they are not consider at the time of detection in early stages and anticipating problems.

The article explain the importance of early warning signals, compare with the theory of weak signals by Igor Ansoff (1975) and complemented by Nikander’s (2002), enumerate the typical barriers to identify it and includes some project strategies to assess them.

Introduction

Figure 1: Phenomena early warning signals

The thought of early warning signal is a wide-ranging concept. It can be applied to any area where it is crucial to obtain indications as soon as possible of any project progress that in the future can be undesirable and change the characteristics of the project prior development.

The phenomena starts with a simple observation of the overall project. Weak signals can occur in any moment together with a message and event informing of future problems. Depending of the responses, action and decisions can be a failure or success for the project process as shown in figure 1. Early warning signals are direct consequences of a critical slowing down of the project development.

Theory of weak signals

Many author have different interpretation and definition for a weak signal. The first who mentioned the weak signal concept was Igor Ansoff in 1975 and later on was supported by Nikander (2002). Ansoff stated that strategic events do not came up from nowhere; it is possible to predict their manifestation by the benefit of signs, which are named weak signals. A weak signal was defined by Ansoff, (1984)^[1] as “…imprecise early indications about impending impactful events…all that is known is that some threats and opportunities will undoubtedly arise, but their shape and nature and source are not yet known”

Later on, this definition was supported by Nikanders’s ^[2] who defined early warning sign as “observation, a signal, a message or some other item that is or can be seen as an expression, an indication, a proof, or a sign of the existence of some future or incipient positive or negative issue” The main purpose of the authors was the improvement in the strategic planning methods, which are not perfect enough. According to them, when companies operates in uncertain environments requires paying specific attention to weak signals before making any strategic decisions. (Igor. Ansoff & McDonnell, 1990)^[3]

Levels and groups of early warnings

Figure 2:Progressivity of weak signals

According with Ansoff (1990), level of information have two stages (strong signals and weak signals): The progressivity of weak signals to get stronger during the time and turn into strong ones is shown in figure 2.

Weak signals can be classified depending of the sources of data, quality of arguments and future impacts; including moreover feeling signals, uncertain signals or precise signals.

• The feeling signals report that something is going to happen. Directly, is connected with the project manager who can have different feelings about things than the other managers, and take different decisions. The human perception varies depending on the person. Normally, this kind of signal are not reported due the missing strong arguments.
• The uncertain signals indicates changes in the work environment, sources are anonymous but is possible to find good reasons about the matter.
• The almost certain signal, are less uncertain but still there are issue measuring and calculated changes and consequences.
• The exact signals, signals with enough evidences of their occurrence.

In addition, according with Kappelman (2006)^[4], early warning can be divided into 3 groups of people, process and product. The group of people that Kappelman refers is to the “top management support” a weak project management with a lack of stakeholders involment, weak team commitment and lack of knowledge by them between others. Some of the weak signals related with the process project are..the lack of documentation, ineffective planing schedule and management, no business case for the project and so on…

Identification early warning signals

The complexity of the projects can affect in the identification of the warning signals. In complex projects, the outputs of some specific inputs are interconnected and dependent, making not easy task identify it. Complex systems has many parts interacting at the same time and with each other, which make the project development uncertain.

Approaches for identification of signals

Some of the approaches related with the identification of the early warning signals are; the risk management, earned value management, project assessment and cause and effect analysis. According with Nikander 2002, early warning problems arise in the future, and obviously, there are a tight relationship between early warning phenomenon and risk management. According with Niklander possible potential future problems are called risk, therefore risk management methods are suitable for identifying early warning signals.

Common project problems

The success of the project goes on the right way having a good plan and right people working on if they are aware of things happening in the project and are ready for unexpected adjustments. Some of the typical project problem are mention below:

Figure 3: Problem phenomena

• 1.Personnel problems in general
• 2.Organization and stuff
• 3.Management problems, wrong person
• 4.Schedule problem, delay, time
• 5.Uncertain objectives
• 6.Delivery problems and performance
• 7.Project planning
• 8.Owner with no CEO support
• 9.Cost-related problem
• 10.Project environment and consultant
• 11.Engineering and communication
• 12.Monitoring and project control
• 13.Lack of commitment
• 14.Other problems

Barriers of identification

The complexity and uncertainly in the development of the project process, make difficult to achieve the requirements adapted in the early stage and not have a project failure.

Moreover, there are many other barriers that makes difficult identify early warning signals. According with the study of different cases, the most common sources of missing EWS are listed below and the possible future problems, which can be and aid to make early and appropriate corrective decisions before negative consequences will be crucial.

Strategic early warning systems

Project assessments include all types of examinations of the documents in the project and the different practices in order to support decisions already learnt from experiences. For determine early warning signals, project models use the previous reviews of other cases and decision points in the project life cycle.

Igor Ansoff (1975 )aim that the strategic early warning signal(SEWS) is to assist organizations in dealing with irregularities or strategic surprises. the fact of detect EWS (weak o strong) allows organization to react with a right strategy ahead of time. The concept of SEWS intends to establish as a part of strategic management system, real time operation in the organization and assist to identify the signals.

Detecting early weak signals is related with organizational environment. The environmental scanning concept was introduced by Aguilar (1967)^[5], describe the process where the environment where the organization operates is scanned to get relevant information in order to identify early signals in the environment changes and detect environmental changes already underway.

The ideal SEWS process have 3 different phases

• Information gathering of weak signals, trends and issues. The scanning the examination of the media sources and the technique of content analysis (Nasbitt, 1982)^[6]. The scanning activity is complemented by monitoring located issues.

• Diagnosis. Issues analysis, examination the core of the phenomena in order to get and impression of the possible future potential development of the problems. Think creative before attempt when trends and issues are involved. examination of the nature of the context to knit up together trends and issues which provides understanding of mutual influences.

• Formulation of a right strategy in order to react against the problems already identified and labelled as relevant for the process of the project.

Conclusion

Despite the large number of tools for identify early warning signals, still a number of signals are not detected. Most of the problems is due the inappropriate governance, initial planning and the growing complexity of the project.

The root causes for missing early warning signals are mostly the lack of management, consideration of critical success factors, wrong risk management methods, and so which affect the wrong governance of the project, involving wrong scanning and impact in the project performance.

In order to solve the problem of missing early warning signs, the strategic planning must be improved. The environment and characteristic of the project makes an important effect on the identification of the early warning signals, providing the culture of continuous scanning, updating the new early warning signal and the most important, choosing the right people for scanning. The workers must be perfectly trained in order to improve the communication among team members, and contribute in solving problems to avoid project failure and delays.

The initial planning contribute on the success of the process project, choosing flexible and adaptable governance helps the team to recognize EWS. Reducing the complexity of the project with appropriate methods of management, helps to recognize the early warning signals.

References

1. ↑ Ansoff, H. I. (1975), Managing Strategic Surprise by Response to Weak Signals, California Management
2. ↑ Nikander, I. O. (2002). “Early Warnings A Phenomenon in Project Management.” (Doctoral thesis), Helsinki University of Technology, Helsinki, Finland
3. ↑ Ansoff, I., & McDonnell E. J. (1990). Implanting strategic management.
4. ↑ Kappelman L. A., McKeeman, R., & Zhang, L. (2006). “Early warning signs of IT project failure” The dominant dozen. Information Systems Management
5. ↑ Aguilar, F. J. (1967), “Scanning the Business Environment”. The McMillian Company, New York.
6. ↑ Nasbitt, J. (1982), “Megatrends”, Warner Books, New York.

Bibliography

• Aguilar, F. J. (1967), Scanning the Business Environment. The McMillian Company, New York.
• Ansoff, H. I. (1975), Managing Strategic Surprise by Response to Weak Signals, California Management Review.
• Ansoff, H. I. (1980), Strategic Issue Management”, Strategic Management Journal, vol. 1
• Ansoff, I., & McDonnell, E. J. (1990). Implanting strategic management. Vol. 2
• Harrin, Elizabeth. Project reviews can help identify early warning signs. The money files blog
• Kappelman, L. A., McKeeman, R., & Zhang, L. (2006). Early warning signs of IT project failure The dominant dozen. Information Systems Management
• Nasbitt, J. (1982), Megatrends, Warner Books, New York.
• Nikander, I. O., & Eloranta, E. (2001). Project management by early warnings. International Journal of Project Management. http://dx.doi.org/10.1016/S0263-7863(00)00021-1
• Nikander, I. O. (2002). Early Warnings A Phenomenon in Project Management. (Doctoral thesis), Helsinki University of Technology, Helsinki, Finland.