What are the primary reasons for project failure?
Based upon our direct experience, as consultants engaged to identify why things went wrong, these are the most frequent causes of project failure:
- Mismatch between the project and organisation’s strategic priorities.
- No pre-agreed measures of project success.
- Ill-defined senior management ownership and leadership.
- Ineffective engagement with stakeholders.
- Poor project management technical skills.
- Non-standard approach to project management and risk management.
- Inability to differentiate stages of project development and implementation.
- Proposal evaluation focused on price rather than long-term value for money and achievement of business benefits.
- Lack of contact with senior management levels in the organisation.
- Poor project team integration between clients, the supplier team and supply chain.
Of the ten reasons for failure raised above, only one is the result of insufficient technical knowledge. The rest relate to more fundamental issues within the organisation. Some are cultural or structural, but all serve as indicators of low project management maturity at the organisational level. In many instances, organisations that are failing have highly competent project managers, whose abilities far outstrip the capabilities of the organisations that they work for in terms of project management maturity.
This scenario is inevitably damaging for an organisation and means that they cannot realise the holistic benefits they might otherwise from project management activities. For instance, if cost management or data collection processes cannot be standardised, how can project performance be accurately measured across a portfolio? Longer term, situations like this usually mean that failure rates for projects increase as their complexity grows and it becomes impossible to measure project management effectiveness across a growing organisation. It means that they cannot easily replicate successes and that’s a major reason why industry research points to high project failure rates.