Project failure. 5 reasons why projects fail | #23 Getting started with project management

According to the Project Management Institute’s 2021 report, the percentage of projects that failed is decreasing year by year. In 2019, it was 15% of projects. In 2020 – 13%, and in 2021 only 12%. To what do businesses owe the gradual but marked fall in the percentage of project failures? And what to do to be among the project teams celebrating success?

Project failure – table of contents:

1. Project failure. Introduction
2. 5x Why?
3. 5 reasons for project failure
4. Summary

Why projects fail? Introduction

We can mention endless reasons for project failures. Did the sponsor drop out? Didn’t the materials meet expectations during testing at the client’s site? Is it turned out that the budget was far too small, and the team fell apart? Each of these reasons is worth studying as it reflects the approach to failures allowing you to prevent them. So how do you discover the underlying problem?

5x Why?

In order not to be driven by emotions and to discover the root cause of the project’s failure, reach out for proven methods. The five-question technique is ideal for this. It was developed by Taiichi Ohno for the Toyota corporation. However, it became popular due to its high effectiveness. Today it is used, among others, in project management based on Lean and Six Sigma methods.

5 x Why? will work as long as we are willing to give honest and comprehensive answers to them. In this way, it may be possible to get to the source of the trouble. In turn, this will help prevent similar mistakes from being repeated.

If the reason for the project failure is, for example, the resignation of the sponsor, the following question needs an answer:

Why did the sponsors resign?

Subsequent answers to questions might look like this:

1. Why? – Because they lost interest in the project.
2. Why? – Because they did not know the current status of the project.
3. Why? – Because they were too seldom informed about the progress of his work.
4. Why?– Because during communication planning, the frequency of meetings and reports deadlines were not determined
5. Why? – Because the Project Manager failed to ensure transparency and communication in the project.

We will therefore look at the reasons for project failures that answer the final, fifth “Why?” question, i.e. source problems. The potential root problems are worth paying close attention to when planning a new venture.

5 reasons for project failure

The most difficult problems to solve that can cause the project failure are related to domains:

• stakeholders – it happens that already at the planning stage there are insinuations that are not realized by the stakeholders who agree on the details of project implementation,
• team – both the task of creating a team and effectively managing its work can be challenging,
• the technical side of the project – both the availability of resources and the skills of the people employed in the project,
• business environment – monitoring and responding to external events is especially important when rapid changes occur, which in turn require a high degree of flexibility and rapid response, i.e., efficient change management.

We will discuss below the reasons for project failures in the following areas:

	Stakeholders	Team	Technical side	Surrounding
Communications	x	x
Scope of the project	x	x
Resources	x		x	x
Collaboration		x		x
Flexibility		x	x	x

Communication failures

Transparency and communication issues primarily concern stakeholder contacts. Arrangements should be included in the project plan to prevent misunderstandings that can lead to the failure of the entire project.

The same principles are also worth applying when planning the flow of information within the team. Here it will be very important not only to make the task list transparent and understandable but also to communicate and remind about the goals pursued by the team.

Unclear scope of the project

Defining the scope of a project and preventing its changes during implementation is one of the main tasks of a Project Manager. He or she must thoroughly understand the client’s expectations and, if changes are made, keep the client informed of their impact on the scope of the project.

Since the project is a one-time venture, limited by a specific time and budget, a vague scope can easily become a cause of failure. For example, we commit to creating a prototype of a $10000 electric bicycle in a month. However, we agree with the customer’s changing expectations. Thus, in the course of implementation, we find that within the same time and budget, and with the same team, we are expected to create a hydrogen motorcycle prototype.

Scope changes in software or event projects are sometimes less illustrative than in our example. But a change in requirements and expected results, tiny from the client’s point of view, can cause completed tasks to land in the trash, while planned team activities require new resources.

Resource issues

Problems with raw materials or components needed for technical tasks can effectively block the project. Therefore, the Project Manager must orient himself to the business environment and consult with team members – including on the resources needed for the project. Untimely deliveries and lack of availability can bring the project to a standstill.

A large problem is also posed by low-quality solutions that, instead of making the project easier, make it more difficult. This can apply to project management software, as well as specialized solutions specific to the project – semi-finished products, visual materials, or transportation availability.

A separate issue related to resource management is the time required by the client to complete tasks. A common reason for the lack of realism in assessing deadlines is pressure from the client or the company’s lack of experience in similar projects. There are also projects whose area of execution does not allow specific completion dates. These include projects where deep learning solutions are being developed. Achieving the assumed accuracy of the model may not only be impossible to achieve within the specified time frame but in general unattainable due to difficult access to data or needed computing power.

Difficulties in cooperation

Another difficulty that can cause a project fiasco is difficulties in cooperation within the team. They can be caused by interpersonal issues, However, the most common cause is an ill-conceived division of responsibilities, when one person is overburdened with work and the others wait for him to complete their tasks.

When forming a new team, there can also be unexpected problems in finding and hiring specialists, as well as difficulties in managing a remote or hybrid team.

Lack of flexibility

Lack of flexibility and the inability to adapt to the changing business environment is a frequently occurring causes of long-term project failures. Changing environments, regulatory requirements, and competitive dynamics can leave a project manager unable to keep up with changes. Or, as happens even more often, he or she is unable to convince key stakeholders of the need to respond dynamically to change. Thus, by the time the project is completed, it may turn out that the result is already obsolete, or does not meet the requirements of the environment.

Summary

Project failures are sometimes associated with unforeseeable events, so the percentage of failed projects will never be zero. However, there are tools to anticipate risks, and contingency plans to deal with them. Even at the planning stage, it is also crucial to pay close attention to transparency and communication with stakeholders. It is also important to strictly define the scope of the project and to agree on the client’s expectations and the contractor’s technical capabilities.

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