Is the availability of greater resources and more money within an organization increase the chances of project success? Is reasonable to think that companies who have better access to funding due to their size or their ability to tap into resources have a higher capacity and capability to handle projects. However, do capacity and capability play a role in enhancing project success? It may be helpful to start with some basic definitions. The business dictionary defines capability as the:
“measure of the ability of an entity to achieve its objectives, specifically in relation to its overall mission”
Various definitions on capacity on the other hand refer to the size of an entity or an object. What is interesting however is the relationship between the two. When it comes to human capital, Wikipedia has the following observation:
“capability is the sum of expertise and capacity.”
Let’s consider this issue in a different context to attempt to shed additional light on it. Consider for example sports clubs (such as the New York Yankees) who have deep pockets. These clubs are able to recruit talent without the same level of worry about budget as smaller/poorer clubs. Their ability to tap into resources in their geography, such as population size, marketing demographics, and coverage inherently translate to a competitive advantage. The saying “it takes money to make money” in this instance holds very true.
Another example that can be looked at is high schools. Schools that are situated in rich neighborhoods and that are able to tap into wealthier tax payers are likely better able to provide opportunities for their students. Conventional wisdom will likely show that students who enroll in schools challenged for funding are likely going to have a harder time finding the opportunities to succeed.
Within project management the same can be said regarding capability and capacity. Rich organizations are better able to provide the necessary resources, financial and otherwise, to increase the chances of success. However, the complex nature of projects, especially considering the change component and its associated resistance activities, provide for a greater set of variables in attempting to predict success.
Elements such as organization culture, team expertise, and many others I’ve discussed in previous posts will often have a greater impact on the project than the simple availability of funding and resources. Understanding the project constraints is almost more important than trying to ask for more money to accomplish the work.
As I reflect on some of my experiences with organizations large and small, I am reminded that enterprise organizations such as IBM are undoubtedly better prepared to handle inherent project risks such as schedule delays, scope creep, and cost over-runs. Organizations that are smaller or ones with less capability/capacity are likely going to encounter greater challenges in reacting to these type of risks. As such, the accuracy of estimates on cost and schedule, along with the appropriateness of the project plans become more important. The need for effective planning in these situations will often become directly linked to organizational viability as opposed to simple project success.
However, while it is true that large organization such as IBM may have the capability of injecting added resources and the capacity of investing more in a project, that does not always mean that they do or should. This is where the role of portfolio management becomes imperative to determine which struggling projects are worth saving. It may be due to strategic alignment or to safeguard the organization’s brand. In this case, not all projects are created equal and as such, the organization needs to have a process to evaluate how to best support projects.
Organizational capacity and capability are foundational elements within projects that need to be considered throughout the project lifecycle. If it is determined that the organization has limited capacity and/or capability to deliver the project, that is the signal that helps the team build plans to address these issues. The project manager may find it helpful to identify answers to the following questions:
- If corrective action is not pulling the project out of a ditch, can additional funding/resources help? If yes, does the organization have the ability to apply these added resources?
- What is the size of the project as compared to the size of the organization? This may be in terms of team size or project cost versus budget.
- Has the organization handled projects of this nature before? Have the team members worked on similar projects?
- Does the organization have processes in place to support the project manager such as procedures, templates, methodologies that need to be followed?
- Does the project team understand how to handle managing in a crisis if the project ends up being derailed?
These are some of the things that the project manager should think about to better understand the context of the project in relation to the organization.
Ultimately success does not depend on capacity and capability alone, but having an organization that is strong on both does contribute to the overall process.