Why projects fail in organisations

By Stephen Mukoyi

WHY do projects fail even when organisations have the best project managers, methodologies, governance structures and sophisticated technology?

The answer is more complex than simply saying that the Project Manager did not perform.

What Does Project Failure Actually Mean?

Before examining why projects fail, it is important to define failure.

Traditionally, project success has been associated with the familiar iron triangle:

• Scope;
• Cost;and
• Time.

Under this traditional view, a project is successful if it delivers the agreed scope within the approved budget and schedule. However, modern project management recognises that this definition is incomplete.

Poorly Defined Business Case and Objectives

One of the earliest causes of project failure is a weak business case. Some projects are initiated because an executive wants something implemented, a competitor has implemented it, or a technology appears attractive. The fundamental questions are sometimes not adequately answered:

• What problem are we solving?
• Why must we solve it?
• What benefits will the organisation receive?
• How will those benefits be measured?
• What happens if we do nothing?
• Is the proposed solution actually feasible?

If these questions are not adequately addressed, the project may begin without a clear definition of success.

Poor Planning

Planning is arguably one of the most important determinants of project success. Poor planning may manifest itself through:

• Incomplete requirements;
• Inadequate work breakdown structures;
• Unrealistic estimates;
• Missing dependencies;
• Inadequate resource planning;
• Poor procurement planning;
• Failure to identify stakeholders;
• Failure to identify risks;
• Inadequate testing plans;and

The time saved by rushing into execution is often lost several times over through rework, change requests, disputes, defects and delays.

Unrealistic Deadlines and Schedule Pressure

One of the most common organisational problems is setting a project deadline before determining what is realistically required to deliver the project. Management may announce:

“We need this project completed in three months.”

The project team then attempts to determine how the project can be delivered within three months, rather than determining the realistic duration based on scope, resources, dependencies and risk. This creates an artificially constrained project. Unrealistic schedules are recognised as an important contributor to project failure. Research has also identified projects attempting to accomplish too much in too short a period as a significant risk. Tight deadlines are not inherently bad. The problem occurs when deadlines are unrealistic and unsupported by additional resources, decision-making authority or scope prioritisation.

Scope Creep and Poor Change Control

Projects rarely fail because of one major change. More often, they suffer from a continuous accumulation of small changes.

• A stakeholder requests an additional feature.
• Another department adds another requirement.
• Management introduces a new reporting requirement.
• A vendor recommends additional functionality.

The project team accepts these changes without formally assessing their impact. Eventually, the original project has become something completely different. This is scope creep. A change that appears small from one perspective may have major consequences elsewhere. Research has identified excessive project changes and changes in scope during execution as important contributors to project failure. The solution is controlled change.

Weak Executive Sponsorship

A project may have an excellent Project Manager and still fail if executive sponsorship is weak.

Sponsors have an important role in:

• Providing strategic direction;
• Removing organisational obstacles;
• Securing resources;
• Making decisions;
• Resolving conflicts;
• Maintaining organisational visibility;and
• Protecting the project’s strategic objectives.

Research has identified inadequate leadership commitment and sponsorship as a significant cause of projects/ programs and portfolio failures

Inadequate Resources

Projects compete with normal business operations for people, money, technology and management attention. A common organisational practice is to assign people to projects on a “part-time” basis while simultaneously expecting them to maintain their full operational workload. The result is predictable. The project becomes secondary. Meetings are missed. Delivery is delayed. Decisions take longer. Testing is postponed. Eventually the project schedule begins to slip. Resource inadequacy is recognised in project failure literature, including inadequate resource allocation and insufficient organisational support. Therefore, resource planning should consider not only how many people are assigned but also how much actual capacity they have available.

Poor Stakeholder Management and Communication

Projects are fundamentally about people. A project can have an excellent technical solution and still fail because stakeholders do not support it.

Stakeholders may include:

• Executives;
• Employees;
• Customers;
• Regulators;
• Suppliers;
• Technology teams;
• Finance;
• Risk;
• Compliance;
• Operations;and
• External partners.

Each stakeholder may have different expectations. A strong project therefore requires a deliberate stakeholder management strategy. Research has found that stronger stakeholder-oriented project governance is associated with project success. Communication should also be tailored to the audience.

Failure to Identify and Manage Risks

Another major reason projects fail is treating risk management as a document rather than a management discipline. A project risk register may contain dozens of risks, but if nobody actively manages them, the register becomes an administrative exercise.

Effective risk management requires:

Identify → Analyse → Respond → Monitor → Escalate

Organisations should particularly focus on risks capable of affecting the project’s critical path, benefits or viability. A project that does not actively manage its risks is effectively waiting for those risks to become issues.

Organisational Culture and the Fear of Bad News

One of the most dangerous characteristics of failing projects is the culture of “everything is fine.” Project teams may recognise that the project is behind schedule but hesitate to report it. A Project Manager may know that a vendor is underperforming but delay escalation. A business user may identify a major requirement gap but remain silent. Management may prefer positive reports because negative information is uncomfortable. This creates a phenomenon where problems are hidden rather than solved. A healthy project culture should encourage people to report problems early.

The question should not be: “Who caused the problem?”

It should be: “What is the problem, what is its impact and what must we do to recover?”

This creates a no-surprises culture.

Technology Is Not Always the Problem

Technology projects often receive the most attention when they fail. However, research has demonstrated that project failure can originate in managerial and organisational factors rather than purely technical factors. Technology may be perfectly capable of delivering the required outcome, but the project can still fail because:

• Requirements were unclear;
• Users were not involved;
• Processes were not redesigned;
• Data was poor;
• Training was inadequate;
• Change management was ignored;
• Governance was weak;or
• The organisation selected the wrong implementation approach.

Therefore, organisations should avoid the assumption that purchasing better technology automatically produces better project outcomes. Technology enables transformation; people and organisations determine whether transformation succeeds.

Weak Change Management

Many projects introduce significant changes to how employees work yet change management is sometimes treated as an optional activity that begins shortly before go-live.

This is a mistake.

People may resist projects because they:

• Do not understand why the change is necessary;
• Fear losing their jobs;
• Do not understand the new process;
• Have not been consulted;
• Lack confidence in the new system;
• Have not received adequate training;or
• Believe the change creates additional work.

Recent project-failure guidance similarly identifies inadequate change management, poor leadership, ineffective communication and weak planning as recurring causes of project failure. Change management should therefore begin at project initiation, not at implementation.

Weak Project Governance

Governance determines how decisions are made, who has authority and how accountability is maintained. A project should have clarity regarding:

• Project Sponsor;
• Project Manager;
• Steering Committee;
• Project Board;
• Project Team;
• Decision rights;
• Escalation procedures;
• Change control;
• Reporting;
• Stage gates;and
• Approval authorities.

Without effective governance, projects can suffer from:

• Slow decisions;
• Conflicting instructions;
• Uncontrolled scope;
• Unclear accountability;
• Executive interference;
• Poor escalation;and
• Delayed approvals.

Research indicates that project governance orientation is related to project success, particularly where governance appropriately considers stakeholders.

The “Hero Project Manager” Problem

Organisations sometimes expect the Project Manager to solve every project problem.

The Project Manager is expected to:

• Manage vendors;
• Resolve organisational conflicts;
• Secure resources;
• Chase approvals;
• Manage risks;
• Fix technical problems;
• Manage stakeholders;
• Produce reports;
• Control costs;
• Manage schedules;and
• Somehow compensate for organisational weaknesses.

This creates the hero Project Manager syndrome.

Project management is a leadership discipline, but project success requires organisational support. A Project Manager cannot independently resolve:

• Lack of funding;
• Lack of executive sponsorship;
• Unavailable resources;
• Unresolved policy decisions;
• Procurement bottlenecks;
• Organisational conflicts;or
• Strategic changes imposed by management.

The organisation must therefore create the conditions in which the Project Manager can succeed.

Conclusion

Project failure is rarely an isolated project-management problem. In many organisations, projects fail because the organisation itself creates the conditions for failure through weak governance, inadequate planning, unrealistic deadlines, insufficient resources, poor communication, weak sponsorship, uncontrolled change and inadequate stakeholder engagement. The evidence suggests that project failure is often interconnected: poor planning can create scope changes; scope changes can create schedule pressure; schedule pressure can increase costs; resource shortages can worsen delays; and weak communication can prevent management from recognising the problem early. The most important lesson is therefore that project success is an organisational responsibility, not merely the responsibility of the Project Manager.

Disclaimer

This article was written by Stephen Mukoyi, a very experienced Project, Program and Portfolio Management Professional, in his own personal capacity. The views and opinions expressed in this article are those of the author and do not necessarily represent the views or position of his employer, clients, professional associations or any other organisation with which he may be associated.