• Tim Dalhouse

The Project Paracompany & Its Five Indicators of Project Health

Updated: Feb 11

How do you really know if you have a healthy project?



If I were to ask a Project Manager if their project is healthy, they would probably start telling me all about project performance related to the scope, schedule, cost, risk, etc. That’s ingrained in them when they hear the term “project health” and these are the kinds of things they regularly brief stakeholders on, like the sponsor and customer. That stuff is super important, but the performance metrics are merely one indicator of project health, and in this article, I’d like to go deeper. As PMs, we’re also programmed to go for the root cause and that’s what I want to dive into here.


Is it possible that our project reports show a project on schedule, under budget, and completing the scope as defined and still not have a healthy project? Well, let’s answer that question with another question – Have you ever seen a project that had healthy report status 6 months ago start to nose-dive towards failure with many or all the report metrics declining over time? Of course, we have all seen that. Many times that is unavoidable due to external circumstances, but very often projects go downhill because they were never healthy from the beginning, even though the early reports may make it look healthy.


Perhaps, we are looking at the wrong metrics for project health in the first place. So, what is a better indicator of project health than the data that we roll-up into reports from our Project Management Information System (PMIS)?


To answer that, I’d first like to suggest the concept that when we run a project with what we commonly call a “team”, we are really running a “paracompany” or a group of people who have been formed into a project organization that takes on similar characteristics to a company. If you first view your project team as a paracompany, then you should also recognize that the same human-group dynamic issues that challenge any company’s health are also challenging your project health.


It’s important to think broadly about who the people are who make up the paracompany of your project. We should really be including anyone that we, as the Project Manager will be leading during the project. Traditionalist thinking may have you envisioning your employees or the people doing the project work as who you will be leading. But we should also include the sponsor, client, vendors, and any stakeholder close enough to the project whom the Project Manager will be able to influence. Overseeing someone’s work is different from leading or influencing their work, and the latter is the more inclusive way to look at who the paracompany includes for your project. Once you have your paracompany identified, it’s time to start thinking about organizational health metrics that you should be paying attention to before even worrying about scope, schedule, & cost. Why? Because if you first take care of your paracompany’s organizational health it will be much easier to achieve and maintain success as seen in the standard data-driven performance metrics that end up in your project reports.


When I was a Sergeant in the Marine Corps, a wise old Master Sergeant once told me to take care of my Marines, and they would take care of the mission. That same advice applies here. If you, as the Project Manager take care of your project paracompany, then that organization will take care of the project.

In Patrick Lencioni’s book, The Advantage, he makes the assertion that healthy organizations are ones that enjoy the below five characteristics. I’ll further assert that these are the most important indicators of project health:


1. Minimal politics among the members

2. Minimal confusion among the members

3. High morale

4. High productivity

5. Low Turnover


Think about that as applied to your projects. Do you enjoy those things within your project’s paracompany? If that were the case, then I’d think every day it would be a joy to manage a project with an environment like that.


But, I imagine your experience in project management has not always been that way and you are probably used to seeing a good amount of project politics, confusion across the team about requirements, priorities and technical solutions, low morale/high frustration, low productivity with work getting sidetracked and off schedule, and key team members jumping ship for another better paying or lower stress job. These very common people-related challenges within a project are likely the root cause to a lot of poor project performance data and even project failure.


I want the reader here to focus on the fact that when people come together to do a project, human group dynamics come into play, and the Project Manager bears the responsibility to lead their project paracompany in a very similar way that a CEO would lead a company. If you learn how to create the right project environment for Patrick Lencioni’s five characteristics of a healthy organization to be the norm, then I suspect you will see much healthier projects and people wanting to have you as their Project Manager over and over again.

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