We have all gone through, or may still be going through, a tough recession. How does such a recession impact projects and what opportunities does it throw up for projects? In this article I try to answer this question.

How recessions impact projects

How do difficult times influence these projects? Experience of the most recent recession and others indicate that such times have a direct impact on the shape, approach to and numbers of projects. I see three issues as significant:

• The choice of projects
• How resources are allocated to projects
• The attitudes to the changes projects bring about

Let’s look at each one of these in turn.

The choice of projects

The choice of projects adjusts as companies move from boom to recession. In troubled times management attention shifts. Selected projects are concerned with organisational survival rather than building for the future. Cost reductions and efficiency drives become primary. This obvious point is supported by one that is less evident.

There is an old argument amongst management theorists. Do organisations shape their destiny through successful strategy, or are those who are successful the ones who respond to the situation most effectively? In reality, it is a balance of these two factors. Managers may like to think they are fully shaping their company’s future, but there are too many external factors which cannot be predicted to be certain of complete control.

What is definitely true is that for most organisations a difficult time means managers feel less in control. More time is spent assessing and responding to the situation. Less emphasis is placed on creating innovative strategic visions.

Does this provide any opportunity? Yes.

Often the most difficult periods are the times to pursue bold plans. The risk is high, but optimising a company’s position in troubled times can give it a significant competitive advantage in the recovery period when it arrives. Being successful in the next boom times are based on pushing forward with innovative ideas during the lean periods. This might just seem like some easy words to say, but there is an important supporting factor to consider. The critical resources needed to fulfil a bold project will usually be more widely available at more economic rates than they were previously or will be in future.

Resources and projects

Whatever projects an organisation decides to do, resources are needed. I primarily mean money and skilled people. In troubled times, investment is scarcer and investment decision making becomes more onerous. This slows down new projects. When risk is high and money is scarce, it is hard to be decisive. We’ve all experienced slow decision making.

Business projects thrive on pace and momentum. Slow decision making is an effective killer of many projects. The sad thing is that many of these decisions are ones that there is limited choice over – and limited impact of getting wrong. People forget that the cost of no decision can be higher than the cost of a poor decision.

But it is not only projects that stall during troubled times. Many other investments are stopped. So, if managers search around an organisation carefully they will find people with free time to work on a project. Such people will not automatically raise their hands when managers ask for a team. Showing you are not busy when an organisation is in difficulty is an easy way to a fast exit. But managers who persevere may more easily locate the team they want, (as long as they have not already been made redundant). Key specialists, whose expertise really has been needed on the project for a long time, are available.

Also, external resources, such as consultants, typically lower their rates in recessions. Negotiate hard and you’ll get a good price! This also can increase the viability of projects.

Easing bottlenecks

Resource bottlenecks are an aspect of troubled times that can give a real impetus to a project. Organisations pursue too many projects at once. An organisation which undertakes 100 projects in parallel, will take significantly longer to complete all 100 projects than one that pursues 10 batches of 10 projects at a time. Organisations focus too much on keeping everyone busy and not enough on the most efficient way to get work done. Of course, real life is messy and it is not always easy to slim down project portfolios.

Nevertheless, businesses waste time and resources pursuing too many projects in parallel. There are many ways to show the inefficiency of excessive parallel tasking. The opportunity of difficult periods is therefore to focus, for once, on the few things the business really needs to do – and to do them well and quickly.

The attitude to change

Business projects are successful if they lead to lasting change. Everyone involved in projects, and anyone who knows about change management, understands the impact of the attitudes of the employees of an organisation. Successful change is not just about organisation design, processes, systems and tools – they may be required but will not alone achieve change. Change can be made to seem extremely complex, but at its heart successful change is about people modifying what they do and how they do it.

Attitudes impact the willingness and speed with which new ways of working are adopted. Challenging circumstances make people more tense than usual. The words “change initiative” often translate in people’s heads into “job losses”. No one likes losing their job – and this aversion increases when their belief is that it will be harder to find a new one.

This tense attitude can be compounded by the pressure to produce results quickly. Often demands are made by senior managers which seem unrealistic. Where teams manage to achieve these demands, they are rewarded by yet another seemingly impossible demand. This apparently endless cycle of “thanks for achieving that goal, here’s the prize – another goal” can be depressing for many staff.

So what is the opportunity? There are projects that every organisation would really like to pursue, but never has done. These initiatives are just a bit too difficult. As previously stated, people are tense in difficult times, and this tension needs careful handling. But in reality, when an organisation is struggling, it is far easier to get alignment around projects that require tough decisions. Consider the extreme situation of an organisation that is going bankrupt. Everyone in this situation accepts that change must be made and often that change must be radical. Making those changes when the same company was booming can often seem impossible. Ironically, it is often the most successful organisations that are hardest to change fundamentally.

Recessions can be an opportunity

This should not be seen as a naively optimistic picture. When a company is struggling bold projects can seem risks that require impossible degrees of courage to take. But even the most difficult situations have some hidden opportunities in terms of what changes are chosen and how they are tackled.

Take advantage of the scarce resources that are available in the difficult period to push your initiatives forward. Those resources won’t be available for ever. Slim down your project portfolios. Focus on those really important changes and get them completed well and quickly. Finally, press on with those difficult changes that in the good times are just too painful a challenge to undertake. No one likes it when their company struggles, but the most successful organisations in the longer run are those that find opportunities in any situation.

What is your view?

Before you go, please tell us what’s your experience of the recent challenging economic times? Has it impacted the projects you have been involved in or how they have been pursued?

Related content:

The Culture of Delivery
Measuring Projects and Change Outcomes
Bridging the divide: project and change managers in business
Process Improvement Programs - When Are You in Need of One?