why do aid projects fail?
TRANSCRIPT
Why Do Aid Projects Fail?
How to execute successful projects and
rescue distressed projects with good
Project Management!
What is the Aid Industry?
Massive Current Human Need:• Health• Nutrition• Housing• Livelihoods
International Community Gives• Bilateral Aid• UN Organizations• NGOs• Private Foundations
$ 160,000,000,000. / 2009
Multi- DimensionalProblem
Context with many unknowns Port au Prince, Haiti
Roots of Failure in Aid Projects:
• Principle-Agent Problem: Organizations/Contractors
• Asymmetry of Information: General Public/Aid Projects
• Inappropriate Project Management Model
• Poorly Trained Project Managers
How much do we know?
Solution!
1.Design the project correctly.
2. Choose the correct project management model, traditional, agile or extreme.
3. Apply project management administrative standards at every stage.
4. Apply the lessons learned by for-profit organizations in contexts presenting extreme challenges.
5. Embed a media reporting component in the project.
Successful Project:
Probability
Very high
High
Moderately high
Medium
Moderately low
Low Negligible
Moderate
Moderately serious
Serious Critical Catastrophic
Impact
Risk MitigationApply Contingency Apply Adaptive ContingencyDocument problem
Does Aid Work? Andrei Shleifer: No The Grabbing Hand Jeffrey Sachs : Yes How Aid Can Work
Failure Rate of Projects: 31% The Big 5:• Project Design• The Manager (risk, performance,
communication)• Management Model• Stakeholder engagement• The Creeps,
(Scope, hope, effort, feature, cost)
Stake Holders:• Constituents• Local
Authorities• Host Country• Donors• Your Agencies• Your staff
Franck Helmcke, Thierry Gardére, Edouard Baussan, Jean-Pierre Blanchard, F. Carl Braun, Lyonel Dartiguenave, Adrien Castera, Bertrand Buteau, Max Chauvet(Photo prise au Fort-Jacques, Fermathe, Haiti)
Effective Response To Non-ComplianceRent seeking: unilateral benefitProfit seeking: mutual benefit Krueger, Anne (1974). "The Political Economy of the Rent-Seeking Society". American Economic Review 64 (3): 291–303. JSTOR 1808883.
• Bond held in lieu of delivery
• Freeze of personal assets
• Revocation of US and EU visa
• Contract jurisdiction in New York
Lessons learned from for-profits
in difficult contexts:
• Community buy-in
• Reaching out to unorthodox partners
• Thinking far out of the box
Types of Contracts:• Fixed Price, requirements are well known
• Time and Materials, you want control over
materials
• Retainer, work statement can’t yet be made
• Cost Plus, performance easily measured
Country: El Salvador HaitiGDP per capita $7,700 (2012 est.) $1,300 (2012 est.)
Population 6,108,590 (July 2013 est.) 9,801,664 (July 2012 est.)
Kilometers of paved roads 2,827 km (includes 327 km of expressways)
1,011No expressways
Project: Highway improvement Status: Successful Failed
Financing: MCC Compact World Bank
Total appraised cost $M:
USD$ $29, 944,625.60 USD$ 14.000.000
Kilometers of 2-lane paved road
138 kilometers 104 kilometers
Connecting cities Metapán - Anamoró Port au Prince- Cap-Haïtien
Dates: November 2006-October 2012
1990 - 2012
Contractors: MECO S.A. (Costa Rica) OAS Constructora (Brazil) Centre Nacional des Equipements
(Haiti)
Companies bidding: AstaldiEternaTopsal
Santa FeGaskapital
Ingeniería Estrella (DR)Vorbe et Fils (Haiti)
Side roads 500 kilometers of gravel feeder roads 1000 kilometers of gravel feeder roads
Bridge work 200 meter bridge built Repair 57 small bridges
Status at scheduled closing date:
Satisfactorily completed Less than 20% delivered,work abandoned and not resumed amid lawsuits
I. Project Scope Management: Highways, Haiti: FAILED El Salvador: DELIVERED
Level: 1 2 3 4 5
Requirements Definition
Statement of purpose
Process to identify requirements
Stakeholders involved in requirements
Functions fully documented
Incorporates quality improvement
Deliverable Identification
Names of deliverables
Customer & management identify deliv.
Detailed description of deliverable
Consistent template for all projects
Improvement in process
Scope Definition
Ad hoc, no standards
Defined scope statement
Assumptions & constraints clear
Documented & monitored
Project experience data used
WBS Basic work components
Third level template
Jointly identify all tasks
Inter-project dependencies documented
Regularly monitored
Scope Change Control
Ad hoc communi-cation
Documented change process
Baselines established & managed
Integrated with organ’s systems
Lessons learned
17- “Project Management Maturity Model,” Crawford, 2002
II. Project Integration: Highways, Haiti: FAILED El Salvador: DELIVERED
Level: 1 2 3 4 5
Project Plan Development
Ad hoc Documented process
Risk, cost, schedule, quality, HR
Integrated w/ organization’s strategic plan
Improvement process in place
Project Plan Execution
Informal, verbal direction
Summary level metrics
Detail level metrics, templates
Variance & performance analysis
Lessons learned
Change Control
Ad hoc, without PM awareness
Scope only changes identified
Scope, cost, schedule identified
Integrated w/ control, risk management
Changes are in efficiency metrics
Project Information System
None Simple PM information system
Standardized system for all projects
Automated system
Continuous improvement of data & sys.
Project Office Informal, no standards or training
Established, training available
PM methods, PM training mandatory
Best practice, PM training for all team
Cost-tracking support, EV, PMP training
18
III. Project Quality Management: Highways, Haiti: FAILED El Salvador: DELIVERED
Level: 1 2 3 4 5
Quality Planning
High-level plans, ad hoc
Metrics of reviews, tests
Quality milestones, checklists
Product environment included
Process critiqued during project
Quality Assurance
No established practices
Walkthroughs peer reviews
QA checklists standard
Walkthroughs with other project teams
Feedback on processes
Quality Control
No established practices
Guidelines for testing (unit, integration)
Standards for testing, client involvement
Performance standards in place
Decisions on usability and fit of product
Management Oversight
Management involvement limited
Mgt assigns PM, receives reports
Institution has standard PM practices
Integrated w/ corporate processes
Active role in management
19- “Project Management Maturity Model,” Crawford, 2002
Project Cost Management: Highways, Haiti: FAILED El Salvador: DELIVERED
Level: 1 2 3 4 5
Resource Planning
Individuals identify resource req.
Resource listing defined
Project office resource repository
Integrated w/ project office & HR
Improve resource priorities
Cost Estimating
Scope statement; ad hoc estimates
Top WBS, cost-estimate template
Cost analysis of alternatives
Integrated w/ finance, acct, risk mgt
Improve forecasting vs. estimates
Cost Budgeting
No established practice
Baselining process not org standard
Time phased estimates, baselines
Integrated w/ finance, acct, risk mgt
Baseline lessons learned
Performance Management
Informal, ad hoc
Summary level tracking
Earned value, corporate financials
Performance indices
Measure efficiency & effectiveness
Cost Control Non-standard tracking
Periodic cost reports
Variance analysis, est to complete
Cost reports integrated w/ tech reports
Cost assessments, lessons learn
20- “Project Management Maturity Model,” Crawford, 2002
Project Risk Management: Highways, Haiti: FAILED El Salvador: DELIVEREDLevel: 1 2 3 4 5
Risk Identification
Risks not identified
Risk identification process
Standards for risk/symptom identification
Integrated w/ cost & time mgt, PMO
Identify org. priority, lessons learn
Risk Quantification
Speculate on impact if risks occur
Structured approach to rating risks
Multiple criteria prioritization
Integrated w/ cost & time mgt, finance
Improve quantification
Risk Response Development
Risks considered as they arise
Informal strategy for handling risks
Contingency plans
Integrated w/ cost & time mgt, PMO
Tracking project reserves
Risk Control Day-to-day problem solving
Individualized approach to managing risk
Risks routinely tracked
Integrated with control systems
Risk assess included in proj execution
Risk Docu-mentation
No historical database
Some historical data
Historical data on common risks
Interdepen-dent risks betw projects
Improve collection activity
21- “Project Management Maturity Model,” Crawford, 2002
Bridges in El Salvador
Recommendations:1. Design the project correctly.
2. Choose the correct project management model, traditional, agile or extreme.
3. Apply project management administrative standards at every stage.
4. Apply the lessons learned by for-profit organizations in contexts presenting extreme challenges.
5. Use modular project execution teams for extreme challenges.
6. Access, build, and use documented lessons in extreme environments.
7. Embed a media reporting component in the project.