Failure is not an easy thing to admit, let alone tackle. When teams face challenges and realize it’s too late to come up with solutions, time and money have gone down the drain and pride is hurt along the way.
On average, large companies that have severe downturns are unlikely to succeed at transformation, according to a study by MIT Sloan. In other words, sometimes it can be too late for companies to save a business or project once they hit rock bottom.
In addition, project failure is on the rise. According to the Project Management Institute’s (PMI) 2018 Pulse of the Profession report, more projects experienced scope creep and were deemed failures compared to the prior year.
Nine Reasons Why Projects Fail
When project managers develop a project plan and assemble a group of professionals to take on a project, they should deliberately define what failure means to them and work to avoid it. For example, priorities for startups can be significantly different from those of larger companies, but the end goal is always the same. Teams want to efficiently meet expectations with minor challenges.
Luckily, business experts have collected a vast amount of evidence to determine the common causes behind why projects fail. The PMI identified the following nine reasons based on common mistakes teams make across industries:
1. Poorly Managed or Inaccurate Requirements
At the beginning of a project, teams must complete a business requirement document that provides the scope of the business plan as well as its functional system requirements (software, infrastructure, etc.) If companies use misinformed or incomplete requirement documents, they might find themselves at odds with what needs to get done. When this happens, the company will end up requesting engineering changes that can halt the entire process of a project.
According to the PMI’s 2018 report, 35% of organizations surveyed said that inaccurate requirements gathering contributed to project failure. A lack of clarity at the beginning of the project makes it “nearly impossible to avoid scope creep,” states the report.
2. Lack of Closed Loop Systems
The technical definition of closed-loop systems refers to a highly controlled system of outputs and inputs. A closed loop promotes control of the process, like a thermostat and a furnace working together in a closed loop to control room temperature. In reference to project management, this means concluding a long-overhauled discussion or “circling back around” to achieve project objectives and stay focused. Conflicts to understand project scope and priorities can arise in the earlier phases of the project. So, teams must be able to ask themselves key questions and spell out business deliverables, leaving vagueness outside the room. The opposite will bring the project down.
3. Inaccurate Data
When a project manager wants to introduce a new project process, they need to verify that its requirements also include data that’s correct and manageable. A team wouldn’t move forward with a project if its budgetary reports were misinformed. Like with money, managers that don’t check data won’t be able to convert it and move a process along.
4. Lack of Management Commitment
Everyone should follow the leader, except when that leader is walking around in circles. If management fails to support the project, there will be no one to highlight the importance of the work at hand. Wayne Brantley, a certified Project Management Professional® (PMP) and adjunct instructor in Florida Tech’s 100% online MBA in Project Management program, says that project leadership must be a part of an organization’s strategy for successful projects.
“Projects, by nature, consist of cross-functional teams throughout an organization that do not always report to the project manager. Faced with such challenges, project managers must motivate and lead.”
The business environment is no stranger to change, and on a corporate level, top management must embrace shifts to integrate them into the working culture. This will inevitably invite leaders to open more to project changes on time and guide their team through the process.
5. Insufficient Training at Any Level
According to the 2018 PMI report, an inexperienced project manager was a primary cause of project failure for 22% of organizations surveyed.
However, inadequate training affects the entire project team. The lack of knowledge needed for the completion of project tasks can turn into a constraint against realizing a project’s potential. In this sense, team members are not the only ones affected. Stakeholders and project managers can suffer the consequences of poor performance and find it hard to mitigate the damages of lost time and money.
6. Lack of Discipline and Controls
Updated policies and procedures should always be available to project teams to provide consistency. Project managers, as well as higher-ups, must make sure that corporate culture is present to promote formal procedures and to avoid following informal and uncontrolled ones instead.
7. Unrealistic Implementations
Accurate communication that’s reviewed across company departments ensures that top management understands the goals, objectives, and risks of every project. When departments are not aware of a project’s status or are handed reports with vague expectations, the confusion can dampen the project management team’s workflow. For example, a client services manager who isn’t clear about the expectations for next years’ quarter can’t execute a strong plan or delegate tasks to their team on time.
8. Scope Creep
37% of organizations deemed a change in project objectives as a top reason for project failure in the PMI 2018 report. Scope creep occurs when additional requirements without formal approval or provision of budget or time are added to a project. Sometimes the scope of a project must change because of overlooked requirements or because of the business model or solutions changes. Project management teams in charge of proper control processes succeed at minimizing the degree of scope creep.
9. Lack of Focus
A lack of management commitment can make leaders, as well as teams, condone unfocused objectives. Organizations need goals and clear objectives to set every project plan in order. If the opposite happens, loose objectives can compromise a project’s mission and purpose. “Inadequate vision or goal for the project” was another primary cause for failure in the PMI 2018 report.