Project Management: The Managerial Process

Chapter 14

Project Closure

Chapter Outline

1. Types of Project Closure

A. Normal
B. Premature
C. Perpetual
D. Failed Project
E. Changed Priority
2. Wrap-up Closure Activities
3. Project Audits
A. The Project Audit Process
i. Guidelines for Conducting a Project Audit
ii. Step 1: Initiation and Staffing
iii. Step 2: Data Collection and Analysis
iv. Step 3: Reporting
B. Project Retrospectives
C. Project Audits: The Bigger Picture
4. Post Implementation Evaluation
A. Team Evaluation
B. Individual, Team Member, and Project Manager Performance Reviews
i. Individual Reviews
5. Summary
6. Key Terms
7. Review Questions
8. Exercises
9. Appendix 14.1: Project Closeout Checklist
10. Appendix 14.2: Euro Conversion—Project Closure Checklist
11. Appendix Case A14.1: Maximum Megahertz Project
12. Epilogue

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Chapter Learning Objectives

After reading this chapter you should be able to:

LO 14-1 Identify different types of project closure.

LO 14-2 Understand the challenges of closing out a project.

LO 14-3 Explain the importance of a project audit.

LO 14-4 Know how to use project retrospectives to obtain lessons learned.

LO 14-5 Assess level of project management maturity.

LO 14-6 Provide useful advice for conducting team performance reviews.

LO 14-7 Provide useful advice for conducting performance reviews of project

members.

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Review Questions
1. How does the project closure review differ from the performance measurement
control system discussed in Chapter 13?

Project closure review is a macro view of project performance as a part of the total
organization. Although closure is concerned about current or past performance of the
project, project closure is also concerned with assessing organizational culture and
support of projects, the project’s fit within the total portfolio of projects, project
priorities, team performance, and lessons learned. The closure review is intended to
include all factors relevant to the project and managing future projects.

2. What major information would you expect to find in a project review?

• Classification of the project—e.g., large/small, platform/incremental, complex/

typical
• Analysis of information gathered
• Recommendations
• Lessons learned
• An appendix with backup information to support recommendations.

3. Why is it difficult to perform a truly independent, objective review?

In most cases those performing the review have some previous knowledge of the
project, which presents opportunities for bias. Sometimes the review team, or
facilitator, is perceived as a jury, but even jury members come with built-in biases.
For example, internal politics have been known to enter into decisions concerning
closure of a project. The simple point is that every attempt should be made to keep
the review independent and objective. If the review of projects is a regular procedure
for all projects, the negative stigma of audits is minimized.

4. Comment on the following statement: “We cannot afford to terminate the

project now. We have already spent more than 50 percent of the project
budget.”

This is sometimes called the sunk cost fallacy. If organizational priorities have
changed so the project no longer supports organizational strategy, the project should
be terminated. Basically, costs to the time of the audit are sunk costs. The decision to
continue or shut down should rest on estimated future costs and project benefits.

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5. Why should you separate performance reviews from pay reviews? How do you
do this?

These two activities are not compatible. It is difficult to be both a judge and a coach
at the same time. Performance reviews are intended to encourage changes in
behavior, encourage career development, and support continuous organizational
learning. These reviews focus on social and technical contributions the individual
contributed to the project team. For example, the 360-degree feedback process has
been used successfully to improve the ability of people to work on teams. As long as
performance reviews are not directly related to pay and promotion decisions, such
reviews are more readily accepted and even perceived as positive for the individual
and organization.

Since pay reviews can result in negative or positive outcomes for a career, they are
perceived as very serious by most individuals. Pay reviews should be more carefully
structured and based on clear standards and criteria known to the person being
evaluated. Every attempt should be made to avoid confrontation.

6. Advocates of retrospective methodology claim there are distinguishing

characteristics that increase its value over past lessons learned methods. What
are they? How does each characteristic enhance project closure and review?

• Uses an independent facilitator. The facilitator is held responsible for identifying

and implementing lessons learned. Independence encourages gaining more
information from stakeholders.

• Includes a minimum of three in-process learning gates during the life project
cycle. These gates catch problems and success during project execution (while the
project is in flight). Corrective action can be taken immediately

• Each retrospective has an owner. Assigning an owner who has knowledge and an
interest in the retrospective, provides a resource for other project managers who
wish to acquire more firsthand information.

• Develops a repository that is easy to use. Such a repository is a basic requirement

of retrospective methodology. Typically, this repository is an electronic search
engine that allows the client to selectively search by project characteristics.

• Mandates a discipline that ensures retrospective are used. Managers of a future

project are required to review retrospectives of similar projects. Failure to avoid a
problem or use a success noted in a past retrospective has dire consequences.

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Exercises
1. Consider a course that you recently completed. Perform a review of the course
(the course represents a project and the course syllabus represents the project
plan).

Students have a tendency to want to evaluate classes in which they were dissatisfied
with how it was conducted. Their emotions may get in the way of objectively
assessing the class as a project. This can be used to reinforce the importance of an
independent auditor.

Below is how one instructor adapted this exercise for a Final Exam.

Assignment

A. You are the facilitator who has been assigned the task of conducting a review
and closure evaluation of a project titled: “BA364, spring 2017.”
Project Team: Instructor and two teaching assistants.
Organization: College of Business.
Customer: Students.
Project Objective: Conduct the four-credit course, BA364, spring 2017
(including weekly lectures, assignments, class exercises, and help sessions).
Assigned Staff: One instructor and two teaching assistants.
B. Your accuracy, candor, and effort are of significant importance to the
organization.
C. Be sure to provide adequate detail (justification, explanation) on each question.
It must be neat and readable!
PROJECT CLOSURE & REVIEW
Organization (College of Business) VIEW
1. Was the organizational culture supportive and correct for this type of
project? Why?
2. Did the project accomplish its intended purpose? (Provide details.)
3. Were the right people and talents assigned to this project? (Provide details.)
4. Was the customer satisfied? (Provide details.)

Project Team (Instructor, Teaching Assistants) View

1. Were the project planning and control systems appropriate for this type of
project? (Provide details.)
2. Did the project conform to plan? (Provide details.)
Other Pertinent Comments

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2. Imagine you are conducting a review of the International Space Station project.
Research press coverage and the Internet to collect information on the current
status of the project. What are the successes and failures to date? What forecasts
would you make about the completion of the project, and why? What
recommendations would you make to top management of the program, and
why?

The International Space Station (ISS) began with the launch of a Proton rocket on
November 20, 1998. The space shuttle Discovery landed for the last time on March 9,
2011 after delivering the final American piece of the ISS. However, the addition of
modules from other countries are scheduled through 2019.

Given the sheer size and scope of this mammoth project, it is under constant public
scrutiny. Students have ready access to news accounts of the project. A good starting
place is entering “International Space Station” in an Internet search engine.

An alternative approach would be to choose another project that has received

extensive news coverage (construction of a sports stadium, an expedition, or new
product).

3. Interview a project manager who works for an organization that implements

multiple projects. Ask the manager what kind of closure procedures are used to
complete a project and whether lessons learned are used.

Students who interview small organizations frequently find close-out processes are
not well organized and even ignored. However, those who interview managers in
organizations with high levels of project maturity, find most of the activities from the
interview relate closely to the chapter content.

This exercise can be adapted to executive classes by having students report on their
own organizations.

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4. What are some of the lessons learned from a recent project in your
organization? Was a retrospective done? What action plans were generated to
improve processes as a result of the project?

This exercise requires students of the class have some experience with projects and
knowledge of lessons learned. In such classes, typical positive and negative topics
discussed are:

• Organizational culture
• Team
• Process
• Virtual project issues
• Scope control
• Process
• Communication
• Change control
• Contractor interface
• Cost

Clearly, these topics are only a beginning.

Formal retrospectives tend to appear most frequently in organizations that have

multicultural and multiple virtual projects. The impetus for some international
organizations was simply the benefits of lessons learned were not being
communicated or acted upon; hence, the appearance of retrospectives. Today, the
retrospective process is filtering down to be used in all organization projects. (See
review question # 6.)

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Case A14.1
Maximum Megahertz Project
Olaf Gundersen, the CEO of Wireless Telecom Company, is in a quandary. Last
year he accepted the Maximum Megahertz Project suggested by six up-and-coming
young R&D corporate stars. Although Olaf did not truly understand the technical
importance of the project, the creators of the project needed only $600,000, so it
seemed like a good risk. Now the group is asking for $800,000 more and a six-month
extension on a project that is already four months behind. However, the team feels
confident they can turn things around. The project manager and project team feel
that if they hang in there a little longer they will be able to overcome the roadblocks
they are encountering—especially those that reduce power, increase speed, and use
a new technology battery. Other managers familiar with the project hint that the
power pack problem might be solved, but “the battery problem will never be
solved.” Olaf believes he is locked into this project; his gut feeling tells him the
project will never materialize, and he should get out. John, his human resource
manager, suggested bringing in a consultant to axe the project.

(Rest of case not shown due to length.)

This case relates to an organizational need for a process to terminate projects early when
the original project objectives cannot be met or are no longer relevant. The case also
points out the need for organizational learning. As the discussion continues, the scope of
the discussion will expand to an integrated process which includes the content of earlier
chapters—mission, priority, definition, resources, control, culture, team membership.
How the case is used conditions the responses from students. If the case is used for class
discussion, the responses will concentrate on review and the issues stated in the last
paragraph of the case. If the case is used as a written assignment, responses are more
inclusive with less attention directed to the issues of the last paragraph of the case. Below
are typical excerpted written responses from undergraduate students.

Problem

• No system for accepting projects

• No priority system, no standard criteria for selection
• Poor project definition
• System does not catch errant projects early in the process.

Symptoms

• Over budget, request for $800,000 is more than original project cost estimate
• Project is four months behind and six more are requested
• Three projects never completed
• Cost overruns and deadlines are being pushed.

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Problem Cause

• Lack of planning in process auditing, which must be supported by an integrative

project management system and culture
• No leadership in developing an integrative project management process for Maximum
Megahertz.

Action Plan

Short-Run

First, use the Dawn O’Connor approach on this project for a gut check. Simultaneously,
form a new project review team for this project. If the outcome is positive (which is
doubtful), provide time and money but with strings attached—e.g., redefine scope, set a
firm schedule, control cost and schedule.

If the outcome is negative, separate the cause from the team. Use reasons such as
shortage of funds, changes in market needs. Be sure you have carefully set up new
assignments for the six R&D stars. Another strategy would be to start pulling stars off the
project because of urgent needs elsewhere. This might weaken their desire to complete
the project if they are needed on projects perceived to have higher priority. The project
could be put on indefinite hold. It is important to save face and keep the stars motivated
and loyal.

Within 6-12 months

1. Set up an integrative project management process which covers mission, priority,

scope definition, project schedules and budgets, and control. (This typical statement is
usually explained in great detail. Although it is not exciting reading, it is refreshing to
see how well students pick up on the connectivity and integration of all the
processes!)

2. Set up a review team which periodically reviews projects midway in the project life
cycle. Observe the similarity to gating review committees found in the field. Most
gating groups are good at closing a doubtful project; they are also very good at
finding at finding ways to help troubled projects get back on track.

A. Keep team as independent as possible with no personal interests in the project.

B. Review on a regular basis, including:

i. Classification of the project by type

ii. Collected data
iii. Recommendations—pros or cons
iv. Lessons learned, reported, and achieved
v. Report if organization priorities are still relevant and culture supportive.

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3. If the organization is large enough, it is suggested a project office be developed to

select and review projects.

These responses should not be perceived as an answer; the problem is very complex and
multi-dimensional.

The authors enjoy starting the class discussion with Olaf’s concerns of “…how to
identify projects which need to be terminated, how they can allow good managers to
make mistakes without embarrassment, and how they can learn from their mistakes.”
This creates a lively discussion. Student responses concerning the issue of saving face for
those working on a project that will be terminated are scattered. Class discussion quickly
identifies the issue that in some cases the project manager and team may not be doing a
good job. Some “punish” syndrome frequently develops. Training seldom comes up in
the discussion, but it probably should. At some point it is necessary to get the class to
return to a process for identifying errant projects and for dealing with participants of a
project which is to be terminated.

Next, we divide the class into small groups. They are asked to come up with a detailed
plan which can be implemented by Olaf. The outcomes are similar to the written
assignment above, but from many viewpoints. (A few PMs in the field have suggested the
maturity model be used to assess and analyze the company, which has systemic
problems.)

The wrap up starts with a question of “Why do so few organizations review projects in
process and less than half not review at all?” The usual answers of time, bureaucracy,
cost, etc. will come up. We push with further questions. What are firms losing by not
reviewing projects? Compare a firm which has a review process versus one with none. Is
there a competitive advantage? We conclude with the need for a project review process in
small and large firms in which projects represent a significant part of their effort. Small
firms may only need a group of two or three people while a large firm may need a formal
process. It is important to note that a good review process depends on good processes for
setting goals; priorities; project definitions, schedules, budgets, and control; and a
supportive culture for project implementation. In all cases, the lessons learned should be
archived and available for use by others.

It is very clear that more organizations are setting up formal processes to review projects
and to enjoy the benefits of lessons learned. Use of retrospective methodology is
exploding, especially in global projects. Gating at significant milestones is assisting in
identifying project that need to be terminated.

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