Why do 3 out of 4 Major Projects fail to Realize Original Goals?

Even when Life Science companies have a very good quality vision and strategy how come there is a high risk of failure to succeed anyway? 3 out of 4 major change projects fail to realize original goals, but why? Execution of the strategy involves the whole company whereas strategy design typically only involves a smaller group. The strategic journey of the projects initiated to reach the quality vision is just as much a change management task as well as a strategic design task to top management. The complexity in communication, planning and execution meets more barriers.

Most often companies fail due to competing resources, functional boundaries, and insufficient skills to handle change management. The most important success factors are ensuring top sponsorship, treating people fairly and involve employees. A structured approach to portfolio management and goals manifested in KPI follow-up will increase the probability of success. Follow-up both on the project portfolio and on everyday task execution in the line organization is equally important. Transparency and follow-up is no longer just of interest to the company itself. FDA has now drafted a guidance for Industry: “Request for Quality Metrics” intended to be submitted to FDA allowing for industry and product quality benchmarking.

Business and quality project portfolio management

One of the most common barriers faced by the companies is the defragmented execution of projects. Individual projects are handled locally in the departments and business units competing for the same resources in the projects. Typically, local projects affect other business units with or without their knowledge, approval or involvement in decisions. The result is a sub-optimal performance and lower returns for the business as a whole. The misalignment between the projects and their objectives may be counter directive, and end up leaving new compliance failures to remediate and deliverables failing to meet expectations.

Top 10 barriers
for major change projects

% of 500 companies

Competing resources

48

Functional boundaries

44

Change skills

43

Middle management

38

Long IT lead times

35

Communication

35

Employee opposition

33

HR (people/training) issues

33

Initiative fatigue

32

Unrealistic timetables

31

Source: PwC Mori Survey: 100 multinational and public sectorcompanies covering all industry sectors in North America, Europe and Far East

The quality cost diagnostic tool is key as a common communication tool in defining the potential of the project – the business case, and the priority and resourcing of the projects. By use of the quality costs identified, the project can set up it’s KPIs driving and monitoring the quality improvements, cost reductions and benefits. Decisions based on factual analyses make it easier to present feasible projects to top management, and for them to rank and prioritize their investments. Hence the quality cost diagnostic tool becomes a powerfull communication tool within the organisation to raise awareness of the importance of quality and secure top management sponsorship.

If you want to read more about transparency in quality costs and building a quality cost tool, please read the blog

Once the quality strategy has been aligned, agreed and finally decided between the business units it is important to continue the cooperation around execution and follow-up. Execution and follow-up on projects in a structured cross-functional set-up is very beneficial to secure progress and effective results. Given the DMAIC model of LEAN Six Sigma the project brief, cross-functional team and project plan can be set. Implementation of cross-functional steering committees are crucial to manifest and continuously secure top management sponsorship, commitment and priority, and to secure progress and results.

Top 10 success factors for major change projects

% of 500 companies

Ensuring top sponsorship

82

Treating people fairly

82

Involve employees

75

Giving quality communication

70

Providing sufficient training

68

Using clear performance targets

65

Building teams after change

62

Focusing on culture/skill changes

62

Rewarding success

60

Using internal champions

60

Source: PwC Mori Survey: 100 multinational and public sectorcompanies covering all industry sectors in North America, Europe and Far East

Now more than ever the fast changing environment calls for much closer cooperation between R&D, the supply chain and QA teaming up and re-organizing around the different product development projects and quality improvement projects. Early involvement is very important to minimize risk of failure and reduce time and costs. We have to learn to adapt and appreciate each other skills, abilities and diversity in cross-functional teams required to succeed.

Everyday task execution in the line organization

Based on the agreed and aligned balanced score card the business units as well as the quality organization set up agreed quality KPI’s to measure the everyday processes. This measurement becomes the effectiveness checks of process improvements and gives you the heartbeat of your company.

Typically, Quality Metrics/KPI’s are expressed in numbers or time spent e.g.:

  • Number of Non-conformances, CAPAs, complaints created and closed per week/month
  • Number of Batches being right first time (RFT)
  • Number of Scrapped, reworked, reprocessed batches
  • Release Lead time in days, Complaint Response time in days

It is important not to confuse quality metrics/KPI’s with the quality cost parameters. Quality metrics most often are expressed in numbers and time eg. complaints received per month whereas the quality cost parameter has a monetary value which in this example would be the total expense value in DKK/USD of internal complaint handling and scrap of the returned goods and maybe lost sales.

Most companies measure quality metrics for internal use – also required for the quality management reviews (QMR) and annual product quality reviews (APQR). However, in July 2015 FDA drafted a guidance for Industry: “Request for Quality Metrics” intended to be submitted to FDA allowing for industry and product benchmarking. FDA has pointed out the benefits of quality metrics to both FDA, the industry, and the patients.

  • FDA: To gain insight into the state of quality for product and facility by quantitative and objective measures and to help identify factors leading to supply disruption. Furthermore, the benefit to FDA is to enhance a risk-based surveillance inspection-scheduling model and help improve the effectiveness of inspections.
  • The Industry: An important element of oversight and control over the manufacture of drugs to ensure quality (section 501 FD&C Act). To enable continuous improvement of process performance and product quality, to support continuous improvement of the pharmaceutical quality system, and the possibility for risk-based principles for reduced post-approval manufacturing change reporting categories.
  • The Patient: Seen from the patient’s point of view quality metrics help industry’s commitment to continuous improvement leading to more robust manufacturing resulting in fewer recalls and fewer quality-related drug shortages. 

However, the industry agrees that this Quality Metric Program needs to start with a small targeted approach to enable industry and FDA to learn and evolve the approach over time. The representatives being e.g. ISPE- International Society for Pharmaceutical Engineering, GPhA – Generic Pharmaceutical Association, CPHA – Consumer Healthcare Products Association, BPTF – Bulk Pharmaceuticals Task Force and IPEC – International Pharmaceutical Excipients Council.

Conclusion

A very good quality strategy may fail to be effective as the initiated projects compete for resources or meet functional boundaries. The strategic journey of the projects initiated to reach the quality vision is just as much a change management task as well as a strategic task to top management. In order to success change management skills throughout the organization is required. The most important success factors are to ensure top management sponsorship, treating people fairly and involve employees.

A structured approach to portfolio management with shared and transparent quality metrics manifested in KPI follow-up will increase the probability of success. Follow-up both on the project portfolio and on everyday task execution in the line organization is equally important. Follow-up on the project portfolio benefit from identified quality cost parameters driving and monitoring the cost reductions and continuous improvements. Adding a monetary value by the quality costs is crucial when prioritizing and maintaining focus and top sponsorship.