What is more important: a good project manager, or a project-capable organisation? Which of both generates the highest success rate? To formulate the answer to this, we must briefly explain the base ratio principle.

Base ratio as an indicator of success

Let’s make an analogy.  Imagine: you have a medicine to treat tuberculosis. The cure is efficient in 95% of the cases. If you now treat 1000 cases: how many successes will you have? No, not 950, or 95%! In the pharmaceutical sector, such a deduction would be called “misleading publicity”!

The reality is that you need to understand the base ratio. This is the ratio of sick persons over healthy persons. Say, there are 2% of the population who suffer tuberculosis. Now we see some interesting effects: out of 1000, 20 people are really sick; out of those 20 the test will successfully identify 19 people as being ill. But the test will also label 5% of the other part of the population as sick, or 49 people! These are the false positives. Add the one that you missed (the false negative) because of your 95% efficiency, and you’ll find 50 true failures.

For every 19 successful treatments, you’ll bleed 50 times…

In project management terms: your project manager may be good, it’s the base ratio that is the leading indicator for success.

The more a company is capable of delivering projects at consistent quality, the higher the likelihood that the next project will succeed – even with a mediocre PM.

The importance of a ‘project capable’ organisation

Having a high base ratio is important to increase the success ratio.

A project, done by a moderate project manager in a performant company is likely to spark more success, compared to a project executed by a genial project manager in an organisation with limited project capabilities.

It is more important to build the company’s capabilities to be performant in projects, than it is to bring the best PM on board if the company has a poor track record.

How you can build a performing organisation, how you can make teams effective in project-mode, how you can increase your company’s capability to take on larger challenges, is subject of our next blog post.

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