What is Project Success?

Multilateral Investment Fund-IDB

Many projects are called failure simply because “projects are projects”

Even having spent 15 years in an international development institution, I am still hesitant to make judgment whether a project should be called a success or not – simply I don’t know how. To illustrate why not, let me do a comparative analysis on hypothetical projects A and B – both are of US$1 million and designed to support youth business creation. I do not want to sound presumptuous, but these are extracted from the real cases based on my ample experiences.

Project A intended to train 2,000 youth and create 100 new businesses.  It tuned out that actually 3,000 youth were trained and 120 firms were created. Two years later, though, 60 firms were no longer in business. Nobody knew what happened to those 3,000 trained youth.

Project B created a guarantee fund and facilitated access to finance for 40 new businesses. When the project was finished, the number was low compared to the original intention of 100.  5 years later, 120 firms received bank loans including the ones without guarantees, and 100 firms are in business today. The banks learned more about the segment and became more receptive to youth startups- something that the project had not anticipated.

Obviously, even with the same budget, you can’t compare apples with oranges. But usually Project A is called a success, while Project B is not. This is what I call “original sin” of development projects. By this I mean some fatal errors exist because “projects are projects”.  There are at least three typical errors which are inherent in being a project, thus almost impossible to avoid.

First, projects need to catalyze rather than being catalyzed, thus look for new elements and innovative approaches, as donors would not be so excited about the same patterns repeated (although every project justifies its intervention by possible replication by others!). Accordingly, there is no benchmark to measure its grade of success. With $1 million budget, 2,000 or 120 is a good number -ambitious or modest?  What is “acceptable” failure rate of business creation with or without guarantees? 

Second, projects need to have managers. Once the goal of 100 or 120 is set, the project manager is necessarily pressed to achieve the goal however unreasonable the goal is, sometimes too hastily, jeopardizing the quality. He or she needs to have jobs beyond the projects.  

Third, projects are judged by rather short-term results. Even when the projects generate meaningful outcomes and positive externality years after the completion, they are not relevant precisely because projects are evaluated by the scope and time frame the very projects determine.

Okay, we need to change this.  Let’s try to monitor carefully the long-term results of Project A and B. The only problem is that I need to do Project C and D, while collecting data of A and B…..