Why Projects Fail

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com

In too many organizations, projects fail often and enterprise project management is a significant competitive weakness. These organizations are unable to deliver projects for their products or services on time or within budget.  The project managers, executives, sponsors and team members don’t know how to play their roles in the company project management process.  Additionally, their projects lack priorities, resources and clear definitions of what they must produce. Most organizations’ projects of all sizes deliver little business value, are often over budget and are often late. Poor company project management processes waste a lot of time and money. The organizations’ worst performance, however, is on their strategic initiatives. These projects have significant impact on the organization and its customers but they often have an 80%+ failure rate. Enterprise Project Management Main PageCompany Project Management

But that isn’t the end of the project failure symptoms in many organizations. There are so many projects underway that many first-line managers spend most of their work day on project assignments. The most productive and dedicated project team members work 60-70 hour weeks without an end in sight. These problems make organizations very vulnerable to competitive moves like competitors’ new products and services.

Company Project Management: The Portfolio of Projects

Let’s take a 10,000-foot view of the typical portfolio of projects in an organization. In the lower left-hand corner are the “puppy” projects. There are hundreds of these small projects and no one outside of the initiating department (and possibly IT or facilities) knows they exist. But when an organization installs effective project initiation processes, two-thirds of these puppy projects go away. They simply can’t meet the required business value justification.

In the upper left-hand corner are the “porpoise” projects. These are the smartest projects in the organization and they have a tight focus and lean staffing. The porpoise projects don’t cost very much and they yield solid payback. Unfortunately, most organizations don’t have any of these because the project managers and sponsors aren’t able to work together to meet the tight focus required for these projects.

In the upper right-hand corner are the “pachyderm” projects that are the organization’s strategic initiatives. These projects cost a lot of time and money and can yield significant business value. However, they often fail for a number of reasons. One reason is that they’re starved for resources. Another is that the project managers, sponsors, senior executives and team members don’t know how to play their project roles. These issues can lead to the slow descent of a strategic initiative into a failed project.

“Pig” projects in the lower right-hand corner don’t start out as efforts that waste a lot of resources and produce nothing. They can start as pachyderm projects but lose their focus and become pig projects. Pigs can also start as puppy projects that balloon out of control because of poor planning and a lack of scope control.

The company project management process requires regular fine-tuning of the portfolio of projects.

Company Project Management: People Don’t Know Their Roles 

Here is the common thread among organizations with problems in their company project management portfolio; people don’t know how to play their roles. Specific roles and responsibilities are necessary for projects to deliver business value on time and within budget.

Executives don’t know how to control the initiation of projects or how to set priorities for projects. Calling everything priority number one is not setting priorities. The executives have to agree on a company project management protocol for the organization. In 2 pages, it can spell out the rules for initiating, planning and tracking projects as well as the various roles people will play. They don’t have to do all the work in this protocol. They just oversee the process and use their authority to enforce the protocol.

The first step is that all new projects must be submitted with the project charter and data to justify the project. Projects that do not meet the criteria in the project protocol don’t get approved and work doesn’t start on them. Next, all approved projects are given a priority and that controls their claim to resources. High priority projects get the “first call” on resources and lower priority projects have to wait. This is much better than starting every project as soon as someone thinks of one and then waging a battle for resources. Allocating resources by priority allows everyone working on projects to have a calendar of what they have to get done, by when, for which project. That does wonders to cut the chaos and confusion in the lower ranks. It is a key element for a company project management system.

Project sponsors often don’t know how to define measurable acceptance criteria for the new projects they want to start. The company project management process requires clarity on how the company will measure the project’s success and what business value it will produce. Sponsors must learn how to define those criteria and create a statement of work  (SOW) to initiate a project. The statement of work is part of the project charter which the sponsor must submit for project approval. Next, project sponsors must learn how to review a project plan and make sure the plan meets the criteria laid out by the company project management protocol. And finally, sponsors play a lead role in approving any changes to the approved project plan.

Project managers often don’t know how to accurately estimate the work and duration of tasks. They also don’t know how to model different ways to deliver the scope. Sponsors need to be given those options so they can juggle trade-offs between the scope, cost and duration. Finally, project managers must be able to spot problems early. This requires accurate status data from the team. The project managers must be able to forecast completion dates and costs and propose solutions to problems.

Project team members often don’t know how to take part in the estimating process for their tasks. They must know how to report status accurately and provide “estimates to complete.” This data is the key to allowing the project manager to spot problems early so they can solve them when they are small. Team members also don’t know how to juggle multiple assignments because the project priorities are not clear.

When everyone knows how to play their role properly, according to the rules laid out in the company project management protocol, the organization has the foundation for fixing their project problems. Now let’s talk about the five steps to improving your organization’s project performance and developing your protocol.

Company Project Management: What Doesn’t Work 

Fixing the project performance mess is tricky and it can be painful. We have worked with over 300 small and medium-size organizations to address these company project management issues. And we have learned that senior management will make the required sacrifices to straighten out project failure only when they can’t tolerate the pain of those failures. However, there are no easy fixes.

You can’t fix the problem with expensive project software and servers, despite what the IT department recommends. Small and medium-size organizations can control up to 250 in-process projects on a PC with software that costs a couple hundred dollars. To do this, you need a high level of compliance with a new, leaner way of planning, scheduling and tracking projects.

You can’t fix this problem by sending a few project managers to training, despite what the trainers tell you. Everyone, including sponsors, project managers and team members, must be trained on how to play their company project management role.

You can’t fix this problem by tightly controlling only the big projects, despite what the consultants tell you. If you only make your company project management process changes for big projects, the puppy projects will run amok, leaving a mess on the corporate carpet.

Finally, you can’t fix this problem by having a few certified project managers or consultants create a paperwork jungle. Endless paperwork and needless meetings are the curse of project management.

The solution is installing a simple, straightforward company project management process that everyone follows. These processes save people time so they willingly follow them. Achieving a high level of compliance is the key to making these processes work better, not adding a lot of paperwork.

Company Project Management: A Five-Step Program That Fixes the Problem 

It is challenging to achieve consistent company project management success because you need to overcome a number of problems simultaneously. Successful programs to improve company project management performance in organizations include these five elements:

1. Executives exercise control over initiating new projects. That means all new projects, not just the big ones, must justify their business value. This will make sure that the resource investment is repaid by the benefits the project delivers.

2. The executives agree on and approve a company project management protocol that details the process and defines everyone’s role. Every organization needs its unique company project management protocol but this document should not exceed two pages. Once again, high compliance by executives and project managers is the key, not fancy processes and excessive paperwork.

3. Everyone gets trained on their role as it’s designed for your particular organization. In the training program, they also learn the data they’ll be getting from decision-making and the inputs they must give. The training must be focused on managing the kind of projects your organization does, not generic academic case studies. The curriculum and case studies must be tailored to the kind of projects you do and your organization’s unique culture. Otherwise, the program isn’t relevant.

4. We’re talking about making significant changes to people’s work habits, so ongoing support is a critical requirement. People need to have someone they can ask about what to do in unique situations. This is particularly true in the first few months of implementing the new protocol.

5. Finally, everyone needs to agree to the implementation plan. It will substantially reduce the number of puppy projects and require the re-planning of some ongoing projects as you clean out the pipeline of poorly conceived projects.

These steps work because they make everyone’s job on projects easier and because they free up a lot of resources from the poor payback projects that are cancelled. This allows people to work on the important projects.

Company Project Management Summary 

To improve your company project management success, people must learn how to play their project roles properly. The project managers, executives, project sponsors and team members often do not know what their role is. And they don’t have the tools and techniques to play it properly. The consequences are devastating. Executives don’t set priorities for projects or allocate resources based on those priorities. The priorities change every day, depending on who a team member talked to last. That causes chaos among the people working on projects.

Additionally, project sponsors don’t know how to define the scope of a project nor exercise the necessary control over changes to the scope. Many project managers don’t know how to use their project software tools to create options and alternatives for project sponsors to consider. They must be able to create those options during planning and every week when there is a problem and corrective action is needed. The project manager must produce a couple of options for sponsors to consider.

Finally, project team members very often don’t know how to estimate the work and duration in their tasks. They also don’t know how to report their progress and make estimates of the remaining work. Without that data on the estimate to complete, project managers and sponsors have difficulty identifying problems early, when they are small and easily solved.

The five step program we discussed addresses each of these issues and will improve your company project management.

At the beginning, when you and Dick talk to design your program and what you want to learn, you will select case studies that fit the kind of projects you want to manage. Chose you course and then select the which specialty case study from business, or marketing,  or construction, or healthcare, or consulting.  That way your case studies and project plans, schedules and presentations will fit your desired specialty.

  1. 101 Project Management Basics
  2. 103 Advanced Project Management Tools
  3. 201 Managing Programs, Portfolios & Multiple Projects
  4. 203 Presentation and Negotiation Skills
  5. 304 Strategy & Tactics in Project management

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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