Projects fail. Not one not two but more than 70% of planned projects fail. But the question is why projects fail and what are the methods to counter the project failure?
As I said above, 70 percent of projects fail, a statistic that is valid for companies large and small, but also for governments and other institutions.
IBM, for example, says that only 41 percent of their projects are considered successful — as in meeting objectives for time, budget and quality. On the other end, the US Government lost more than $32 billion, with 41 percent of projects seen as a complete failure.
Failure is part of the job. Unfortunately, when large projects fail (especially in the IT), all companies are put at risk.
To change this, you need to do an in-depth analysis in the early stages of any projects. In most cases, you can avoid failure with practical measures and a clear plan. Here are four common reasons why projects fail and a guideline to counter them.
Too much waste is the main reason why projects fail
In 2022, American companies wasted about $120 million for every $1 billion they’ve invested. That number is expected to lower as more project managers focus on efficiency and learn to prioritize.
Cutting down waste requires significant efforts from all your staff, but it pays off in the long run. You must control every step of the project, to make sure no one stays behind, generating a chain of delays and missed deadlines.
Waste is the result of many elements. Some of them are:
- Bad planning. When you start on the wrong foot, there’s a higher chance to miss essential things on the way. Take the time to plan every part of the project right from the start. You can’t adapt as you move on with things. In most cases, you have to do it all over again from scratch, which means more money spent and significant delays.
- Too many meetings. Communication is vital for any project. But if all your team members are up to their ears in reunions and conference calls, you risk losing their focus. Most meetings are a waste of time. Use a project management tool to keep all your staff in one place. Encourage them to use the software to make communication efficient. The less time they spend in meetings, the more they can concentrate on their tasks and have fast turnarounds.
- Misplaced files. Office workers waste too many resources looking for lost information, old records, and other gone documentation. You need to implement working protocols and tools that maintain workflows. If one department wastes half a day because someone’s lost an invoice, the entire team can remain behind. Automating these tedious tasks with software like GetYooz is the best solution.
- Off-target tasks. To increase productivity inside the team, you should make sure every responsibility goes to the right employee. Otherwise, people don’t fulfill their potential, and you get mediocre results.
Bad Risk Management
Many projects fail because managers don’t know when to take opportunities and how to handle risk. When you plan a project, you should include specific measures to minimize your company’s exposure. You must evaluate every scenario, based on a detailed analysis; and you should decide if the benefits are worth the chance to take.
Fail to manage risk, and you’ll never bring your project to an end. Every time you make decisions inside the project, consider all the critical elements that can influence processes.
Here are some quick tips to minimize risks:
- Learn as much as you can about the circumstances in which you have to perform every activity;
- Get informed about all rules, laws, and regulations in the industry;
- Identify all possible risks and their sources, to be able to counter them;
- Communicate your worries to the team and superiors;
- Evaluate your current possibilities to deal with threats – human resources, finances, brand reputation;
- Analyze previous projects to see how you’ve handled similar issues in the past;
- Document all solutions for future activities.
Risk management means coming up with innovative solutions and taking action at the right moment. Failure is part of the job. It’s up to you to turn into opportunities any possible disasters.
A Lack of Interest from Senior Management
A study by the University of Ottawa revealed that 33 percent of IT projects fails because senior management isn’t sufficiently involved — more than the projects that fail due to poor management skills. In fact, if no one up there is interested in putting things on track, not even the best PM can have a good return on investment.
Every project should have a sponsor, someone from senior management in charge with controlling progress. This person establishes the responsibilities of the project manager, decides whether stakeholders should get involved, and signs all documentation.
The senior management should be involved in all steps of the project, from choosing the right project manager to reviewing tasks and approving in time any budget changes.
Having a sponsor who’s interested in the project is as valuable as working with highly-prepared project managers. So, make sure that you invest in training and that you keep your PMs updated about the latest trends. Whether they get PMP certification in Seattle or any other part of the country, qualified PMs are more likely to have a good ROI, thanks to their in-depth knowledge and expertise in the field.
Not Setting CLEAR Goals
When you don’t have clear objectives, you can’t find the correct approach — which leads almost always leads to project failure.
But, “clear” goes beyond having your goals written down in your project plan. You must make sure that what you’re willing to achieve is aligned with the organizational strategy; and that every milestone inside the project respects the principles on which you’ve built your company.
The theory teaches that goals should be SMART: specific, measurable, attainable, relevant and time-bound.
The new working reality has introduced a new concept of CLEAR goals:
This way, you’ll be able to build a flexible strategy that adapts to your employees’ needs, motivates them, and allow you to keep up with the business environment.
Projects fail — the broader the scope, the higher the chances of encountering difficulties in implementing changes. You need to be ready to deal with problems. Detailed risk analysis and robust measures to minimize exposure are as crucial as having support from senior management levels. Above all, you need an experienced project manager to face challenges and embrace change when it’s needed.