Most Organizations Have a 70% Project Failure Rate
Project success = produce planned deliverables, within budget and on time (including approved changes)
Using this definition of success, we find that most organizations have 70% project failure rates. That project failure rate wastes so much money and human resources that even a small increase in the success rate is worth a lot. But the solution is not easy. Poor performance causes high project failure. The poor performance is at three levels in the organization: executives, project managers and team members. To cut the rate of failure, project managers must coach both the executives (subtly) and their team members (directly) about their roles and expected performance. And implementation of a project process in the organization is vital to reducing the project failure rate to under 20%.
How To Avoid Project Failure: Executive’s Role
Executives set clear measurable(numeric) objectives for projects. They ensure all projects they allow to proceed yield business value and they allocate resources based on that value. Most executives fail at their project role and this contributes to project failure. Here is an example of how they usually operate.
An executive calls two subordinate managers into a meeting and says, “We have a mess in customer service and we have to fix it. This has to be priority #1. Drop everything else and clean up the mess. Install new systems and procedures and whatever else we need for World Class Customer Service! In fact, we’ll call it that – the WCCS Project.”
One of the managers says, “Didn’t we do that last year? I mean the acronym we used was different but this project sounds familiar.”
The other manager says, “You’re right. In fact we’ve done this 3 times since I’ve been here.”
The executive snaps back, “Yes, and each earlier attempt failed. Let’s do it right this time.”
The two managers exchange pained looks as the executive goes on, “Now, I have two other ideas for projects to cut costs and improve service. So here is what I want…”
The first manager interrupts with a groan, “You always have great ideas, boss, but our plates are full. Our first-line supervisors are already spending half their time on projects and their real jobs are suffering. The engineering and technical staffs are all working 70 hour weeks. Something has to give.”
The executive frowns and says, “I know what’s going on down there and there’s plenty of time to squeeze in a few more projects. Your people just have to work smarter not harder!”
Instead of giving the project managers a clear unambiguous objective, the executive gave them mission statement mush of World Class Customer Service. There was no assessment of the project’s business value. Additionally, he refused to tackle the politically difficult task of setting project priorities for allocating the limited human resources.
How To Avoid Project Failure: Project Manager’s Role
Project managers conceive, manage and control projects. They use best practice techniques to ensure the projects deliver their planned outcomes efficiently. Many project managers also fail in their role and contribute to project failure. Here is an example of how they operate.
A newly promoted project manager enters the cubicle of an experienced project manager and says, “I’m really nervous about my new project. The way my director was talking this morning, the world may end if this project fails. My boss said this is priority number one! I’m gonna tell my family not to expect me to leave work on time for the next six months. I’m worried that I’ll be in real trouble if I don’t bring it in on time and within budget.”
The experienced project manager laughs and says, “You’ll laugh too after you’ve heard that speech about 50 times. On the first day they all talk loud and long about how important the project is. But when you ask them to spend an hour or two planning this critically important project, they’re too busy. When you ask them to make sure the project team members from other departments actually show up to work on your projects, they’re too busy for that too.”
The rookie relaxes and says, “Okay, you’ve been there and I haven’t. I’ll take your advice. Can you tell me how the company wants project plans and schedules put together?”
The experienced project manager chuckles again and says, “We have no standard methodology. Every project manager in the company just wings it. You can’t possibly put together a plan when executives make you start work before they decide what they want. When you try to define the scope or even ask what the project is supposed to produce, you usually get a long speech about how we need to react quickly and stay flexible. The best thing to do is write down what they want you to do first and do it. Then go back and ask them what they want you and the team to do next. They want to micromanage everybody anyway. There’s no sense creating a lot of plans and schedules – they’re always a joke.”
The rookie gasps and says, “You’ve got to be kidding. This is a successful organization. How can we be successful without project plans and schedules?”
The experienced project manager smiles and replies, “I’ll help you with that. I’ve got a bunch of old project plans and some really big work breakdown structures you can use to copy and paste. If anyone asks, you’ll have a really big plan and a highly detailed work breakdown structure that no one will ever look at anyway. But you won’t be responsible for project failure.”
Instead of the project managers pushing for the use of best practices, they act like order-takers at a drive thru restaurant. They give little thought or energy to planning or how to avoid problems before they occur.
How To Avoid Project Failure: Project Team Members’ Role
Team members make accurate estimates of the work and time. They report status accurately so problems are identified early. Many team members fail in this role and contribute to project failure. Here’s an example of how they operate.
Two technical professionals with heavy project workloads meet at a table in the company cafeteria. The first technical professional, who is new to the company, grumbles, “They gave me three new project assignments this morning. I was afraid to say anything but there is no way I can get them all done by the due dates. It is more work than three people could do.”
The second technical professional laughs, “They’re always starting new projects and if you try to do all of them on time, you’ll kill yourself for nothing. Just pad the estimates by 50 or 60% so the project manager can’t blame you for the project failure. There are so many half-done projects floating around that no one remembers them all. My rule is that if no one has talked about a project in the past month, I don’t do any work on it.”
The first professional replies, “But when we start these projects, the boss says I am committed to the estimates and completion dates. That’s exactly what he did on some projects two weeks ago.”
The second professional laughs again, “Oh yes, you’re committed. Has the boss asked you about any of those older projects recently?”
“Then they’re dead ducks. Work on the projects people are screaming about.”
“But I’ve put dozens of hours into some of those old projects,” complains the first technical professional. “Does the organization want me to just throw that time away?”
Shaking his head, the second technical professional replies, “I think we waste about a third of our time on projects we never finish. And we have high project failure rates on the ones we do complete. That’s why you shouldn’t get excited about flushing another one that’s headed down the drain.”
Instead of making accurate estimates of the amount of work and time required, project team members focus on avoiding blame.
How To Avoid Project Failure Summary
Organizations that consistently succeed with projects perform well at every level in the project management process:
- They control the initiation of projects; planning, approving and monitoring projects based on the business value those projects produce.
- They manage the pool of project resources just as they manage their capital budgets; allocating people’s time and money to projects based on the project’s payback.
- They follow a consistent methodology for all projects; holding people accountable for measurable achievements. To learn a complete methodology for project success in our private online training.
Author: Dick Billows, PMP
Dick has more than 25 years of project and program management experience throughout the US and overseas. Dick was a partner in the 4th largest professional firm and a VP in a Fortune 200 company. He trained and developed 100's of project managers using his methodology. Dick is the author of 14 books, over 300 articles and director/producer of 90 short project management training videos. He and a team of 25 project managers work with client companies & students across the US and in Europe, South America, Asia and the Middle East. They have assisted over 300 organizations in improving their project performance. Books by Dick Billows, PMP are on Amazon.com
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