It's been eight years, but the memory is still fresh in Dennis B. Lynch's mind. He'd spent 14 months heading up an order fulfillment installation system at the Milwaukee manufacturer where he worked, when he realized that the system just wasn't salvageable. "Everything looked good," recalls Lynch, now vice president of information technology at Chicago-based Turtle Wax Inc. "And then, as you got into it, the color started to change."
It was difficult to let go of the project, says Lynch, particularly because he had so much emotional energy invested in it. "I think that professionals bring in a lot of pride," he says. "And they go to more heroic efforts to keep it alive."
But rather than feel sorry for himself, Lynch rehashed the project in his mind and identified the points of failure. Two years later, he even wrote about the failed project while working toward his second master's degree. "You have to recognize that these things happen and say, 'I'll learn from this and be smarter next time,' " he advises.
 | | | Getting Back On Track Here are some strategies from CIOs and management consultants on how to avoid future failures: Jim Jones DirectorInformation Management Forum, Atlanta • Find out what went wrong and why, and figure out how to avoid making those mistakes again. • Secure a sufficient training budget for projects, so employees are prepared for new systems. Abraham Nader Senior vice president and chief operating officer Dollar Bank, Federal Savings Bank, Pittsburgh • Do your homework before embarking on a project. Make sure it can succeed. • Make sure all divisions are aligned and fully invested in the project. "Things work a lot smoother, because people aren't pointing fingers at each other." Dennis B. Lynch CIO Turtle Wax Inc., Chicago • Get good people. "Good people always make things happen." • Don't be afraid to call it quits when a project isn't working. • Foster teamwork among your staff, and make sure everyone "checks their egos at the door." Vince Swoyer Retired CIO Sara Lee Corp., Chicago • Learn from your colleagues. Go to school on others' failures. Edward M. Roche Consultant The Concours Group Inc., New York • Keep teams small. With more than five to seven people on a team, coordination costs are bound to get out of control. • Make sure there's a master architect, so the threads of the project don't spin off in different directions. • Implement policies - such as a communication blackout, where there are no telephone calls or meetings - so staff can reach peak productivity. • Be specific about project outcomes, and communicate those outcomes to staff. |
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A wise strategy, says Jim Jones, director of the Information Management Forum, an Atlanta-based organization of IT leaders. There are a variety of reasons why IT initiatives fail, but successful leaders evaluate those failures and grow from them, he says.
"There are always lessons to be learned from successes and failures," Jones says. "Cut your losses, but don't lose your failures. Do a postmortem. What went wrong here? Because that will tell you a lot about your people, your organization, yourself."
As the speed of business accelerates, it becomes even more crucial for IT leaders to analyze the successes and failures of past projects, because once the next project starts, there's little time to make up for mistakes as you go along, says Jones.
"You can't afford to make the same mistake twice," he adds. "That would just say that you're not a very bright person. Not many people are going to the same broker that lost $20,000 for them last year."
Lynch says he learned important lessons. He determined that the order fulfillment project he spearheaded had two key problems: It faced internal politics (there wasn't enough buy-in from his colleagues), and the consulting firm he hired made promises it just couldn't keep. For example, the vendor's software had problems that the consultant kept saying it would fix but ultimately couldn't.
Lynch's analysis paid off. He persuaded the consulting firm to refund the company's money, and he learned not to make the same mistakes again. In fact, he quickly moved on to bigger and better jobs, and five years after the project, he won an award from Midrange Systems magazine for successfully installing an enterprise resource planning (ERP) package at Orval Kent Food Co. in Wheeling, Ill.
"The key thing is to try to identify the critical success factors of the project early on," he says. "And then periodically re-evaluate those factors. And sometimes, call a halt to a project. Don't be afraid to end it."
Out of Control
Bigger isn't always better.
In fact, for large-scale projects, the failure rate is between 50% and 75% higher than that of other projects, according to Edward M. Roche, a New York-based consultant at The Concours Group Inc. Roche and Prof. Kenneth Laudon at New York University's Leonard N. Stern School of Business recently completed a study of failed projects at major corporations. They found that the failure curve turns upward as projects become larger, because they become more complex and harder to control.
And the stakes are high, says Roche. "Obviously, people don't jump into the ocean . . . but I'd put out your resume," he tells CIOs who have led major projects that have failed. "Most people get wiped out when you have these failures. They cost millions of dollars."
Besides, he says, failure is inevitable for many CIOs. "All CIOs who are honest, they have [failed]," says Lynch. "Or they haven't been in the job long enough." Or, he says, they aren't doing a good enough job, because they're obviously not taking risks such as trying new technologies that will move their companies into the future.
Roche says there are three common sources of failure in large-scale projects: poor management and oversight, ineffective reporting structures and low motivation.
"Project control and organization for these things are critical," he says. "It's very easy for these things to spin out of control or fall into lethargy. So the role of the manager is to keep [the goal] in mind and communicate that to the employees."
Delayed Gratification
That's exactly what Andrew Scott has been working on for the past few months.
Scott, a former consultant at JBA International Inc., an ERP software maker in Rolling Meadows, Ill., was hired as technology director in June by one of his clients, AeroGroup International Inc., the maker of Aerosoles shoes.
In 1998, the Edison, N.J.-based company began implementing a version of SAP AG's R/3 software that was specially tailored for the shoe industry. But AeroGroup faced so many problems implementing R/3 that it switched to JBA's product one month before the planned February 1999 launch date. But soon after the shift, JBA was bought by Toronto-based Geac Computer Corp., and the project was put on hold. Employees throughout the company started to grow frustrated by all the delays, and many gave up hope that a new system would ever see the light of day.
"The first thing you do is blame the system," says Scott. "[Employees] started to doubt whether IT had the skill set to implement it."
Scott says he knew he had to win the CEO's support to move the project forward. "He supports us now, so it makes the whole flavor of the implementation a lot different," he says.
But even more important, he had to win the support of his staff. At the time, morale had hit a low point.
"Nobody knew what was going on," Scott says. "They didn't know if they'd have a job tomorrow. They just fired the VP [of IT]. The [IT] director quit."
Scott sat down with all the members of the IT department and encouraged them to stick it out so they could eventually reap the rewards.
"It's easy to support a system," Scott told his employees. "It's hard to implement it. . . . I knew that if the system went in, they would see the benefit."
AeroGroup is still facing an uphill battle. The new system isn't due to go live until April. But, Scott says, he's starting to see new signs of confidence throughout the company. "We're not where we should be," he says. "But I see it growing every day."
Vince Swoyer, a retired CIO who spent 17 years at Chicago-based Sara Lee Corp. and Miami-based Ryder System Inc., says that in all his years as an executive, he managed to avoid what he would call "a total failure." But he saw colleague after colleague fall victim to failed ERP implementations.
One of his employees from Sara Lee was hired in the early '90s by a Fortune 500 company to lead an ERP implementation. He was given what was at the time an "ambitious budget" of $20 million. "When it hit $100 million, he left the job," says Swoyer.
"He's experienced some serious failures and survived quite well," Swoyer says of his former colleague. "I don't know of any case where [a CIO has] really suffered. They invariably go on to something else that is as good or better."
It's simple common sense, says Swoyer. "If you've gone through a failure . . . you're of value to the next place, because you won't make the same mistake again," he says.
And, as Lynch points out, failure is a consequence faced by visionary CIOs who are willing to venture into new terrain to move a company forward - a critical characteristic, particularly in the ever-evolving world of IT.
CIOs need to get out there and show people that they have analyzed a problem, know what can go wrong and won't do it again, particularly in the dot-com world, Jones adds. "Twenty years ago, you were seen as a pariah," he says. But today, "you haven't lived if you haven't bankrupted a few companies.
"It's almost like a red badge of courage to have failed, because you learn so much from it," he adds. "And you are respected. . . . People understand that because there was so much pressure to get out there so fast, a lot of mistakes will be made."
Many top executives of recently failed dot-coms have been surprisingly frank about what went wrong. It took only one month for Toysmart.com Inc. CEO David Lord to stand before an audience of his peers at Computerworld's Premier 100 IT Leaders conference in June and detail what happened to his firm and why.
And while the experience was painful, CIO John Puckett told a Computerworld reporter at that time that there was a bright side.
"It was painful, with incredible highs and lows," he says. "But I learned more in the last year than I learned in 10 years in corporate America."