This article was originally published in PM World Journal.
There have been huge advances in project management in the last 20 years, but the elephant in the room is the issue of Project Failure.
Success rates are not improving and the metrics surrounding project failure have been disturbing for decades — at least 50% of projects do not deliver on their promised results.
These failures can cost hundreds of thousands of dollars – and into the millions – for very large projects. In addition, lack of program management can cost companies millions of dollars in cost deviation. This is important because, over time, the value of your corporate brand and enterprise success rate are related.
The causes of project failure are well known, predictable and have not changed over several decades. Yet projects and organizations continue to be impacted and do not seem to be able to create the environment in which projects can succeed. It would seem that organizations have a fundamental inability to learn the lessons of project failure.
There are many causes of project failure and every failed project will have its own set of issues. Sometimes it is a single trigger event that leads to failure, but more often than not, it is a complex entwined set of problems that combine and collectively result in failure.
This inability to learn from project failure is across all industries and sectors and includes many of the most successful organizations on the planet. The financials of failure are staggering and a complete industry has emerged to address the reasons for failure, which are as predictable as the next dawn.
We also often realize with the benefit of hindsight that most failed projects were exhibiting early warning signs and there was sufficient opportunity to respond but the signs were not acted upon in a timely fashion.
The definition of success or failure is not as straightforward as was once imagined. We are now very aware that project success cannot be adequately defined within standard parameters: completion within time, cost and performance expectations.
Cost and schedule performance are still important but the perception of project success now also includes:
- Meeting the functional or technical specification
- Meeting the business case
- Engaging with stakeholders
Failure is not comfortable to embrace but it can often be a catalyst for success, especially if project failure comes early in product development and is accepted by all involved as a way forward.
Research shows that about 50% of projects fail because of the lack of visibility over the entire spectrum of the project management process. Take, for example, software development or the creation of a new medical device. Management of the project may involve numerous teams, each dedicated to a certain aspect of the process. However, they are operating in silos, each with its own operational style and strategy for success. If these teams don’t communicate effectively, the result is often failure to deliver a successful product, often due to cost overruns or relevance to the target market.
Why Projects Fail
When projects fail, hindsight often reveals that issues were bubbling up – but ignored. These issues may include a lack of hands-on project sponsorship, team leadership, lack of resources, inability to manage change, and lack of communication. Lack of communication is the basic culprit because without communication among project teams and leaders, there’s no clear visibility into the development process and thus what we call no “single version of the truth.”
However, when failure occurs early in the project lifecycle, it’s because of clear communication among project teams, leading to that single vision of truth. Early failure triggers positive change management and the revamping of strategies, providing a window to a successful result before massive dollars and precious resources are needlessly spent.