No One Wants a Lemon

Running a capital project without spending the time to do upfront planning is like going to a random car lot and choosing the first red car you see – chances are you may end up with a lemon on your hands!

It is generally accepted that success of a capital project is defined as:

1. Project stays within budget
2. Projects finishes within schedule
3. Final, installed, commissioned project meets performance objectives

These criteria have a tight interrelationship and when one goes out of balance, the others generally follow.  For example, the timeline is shortened, so costs likely will go up due to overtime and expediting costs, shortcuts may have to be made and inferior equipment chosen.

Upfront planning is one of the most critical pieces to improving the capital process and increasing the number of successful projects; more projects that come in on time, on budget and do what they are supposed to do.  If you look at your company’s capital project performance, how long was spent in the planning phase?  Can you relate this to the number of successful projects, how many actually closed versus the ones that were cancelled?  

Each project is different with a different level of complexity so measuring time may not necessarily be the best measure of upfront planning.  The better measure is evaluating the outputs of the planning stage.  Where project expectations and goals clear, understood, agreed upon by all and achievable?  In other words, were they SMART (Specific, Measureable, Achievable, Realistic, Timebound)?

Just like buying a car, if you don’t know what you want when you start shopping, you may just end up with a lemon and no one wants a lemon car!