Capital Projects

7Project DefinitionThe Fundamental Capital Project Concept Every Executive Must Understand

The quality of project definition at authorization is the best indicator of whether a project will come in on time, on budget, and meet specifications. A project with strong definition has done the work to identify the scope of work, has planned how the work will get done, and is prepared to start the execution stage. Achieving strong definition does not guarantee success; many things can still go wrong, especially if you or the project team become complacent, but the chances of success are much higher than for projects with weak project definition. Think of it this way: Strong project definition is the best insurance you have against the dreaded task of having to go to your boss or the board of directors to ask for more money or having to explain why the project is going to be very late. In this chapter, I will show how executives control the level of project definition reached at authorization. When you do not let—no, demand—that the project team complete the definition of the project before authorization, you are setting them and your project up to fail.

The basic concept of project definition is not hard to understand. Anyone who has tackled a home improvement project already understands it. Say you wanted to convert a bedroom into a home gym. One of your kids has graduated from college, and you have convinced yourself they will only be returning for the occasional visit. Project definition ...