Why Nearly 7 in 10 Projects Fail, and How to Ensure Yours Succeed
Count how many projects you’re involved in right now in addition to your regular job. What’s the number? Three? Five? More than 10? Brace yourself; the number will likely go up.
The numbers of project starts have accelerated in the past few years. They’re growing so quickly that it’s estimated companies will need 88 million people in project management related roles by 2027.
That’s scary news because, despite all the hard work, 65% of projects fail. That means a lot of resources are wasted and benefits unrealized.
Why projects fail
Antonio Nieto-Rodriguez is a leading expert in project management. Through more than 25 years spent analyzing projects from all angles, he has observed multiple reasons why most projects fall. He categorizes the issues in three main buckets.
Senior leaders are often tasked with prioritizing and selecting which projects to start, but many have neither the technical skills nor the time to lead projects properly.
For example, a senior leader may head the development of an app but lack a fundamental understanding of the software used. Or even have familiarity with project management methodologies. Without the fundamentals, how can this leader accurately judge a team’s capacity and resources to handle the project? How can they guide a project to stay within scope and budget?
They may also have a time issue. Senior leaders are busy people who may be involved in 20 projects on top of their other duties. So, they may have only an hour or two to spend on each project each month, which may not be enough to provide helpful guidance.
Both of these shortcomings are avoidable. Nieto-Rodriguez suggests before starting a project:
- Make sure the senior leader is fully engaged. If they’re not engaged, the project will likely fail.
- Ensure the senior leader makes time for the project and understands their role.
- Aid senior leaders in developing a reasonably proficient understanding of the technology, features, product, service, or capabilities that the project aims to produce.
- Create a high-performing team where everyone feels they have a place to contribute, and are recognized.
- Hold the senior leader responsible for delivering the value and benefits of the project, not just delivering it on time, within budget and scope.
As companies become more established, they create more silos and hierarchies based on job descriptions. This traditional model is great for the operations-based work it was designed for, but it slows down project-based work because people must squeeze projects in between their regular jobs.
Employees may be able to work on a project only 10% to 20% of the time. Some team members may work on it one day a week and others three days a week. The sporadic and often asynchronous commitments make it difficult to get quality work done and deliver projects on time.
Here’s how you can speed projects along for a more successful finish:
- Get senior leaders and stakeholders engaged from the beginning.
- Define what project success looks like—don’t make assumptions. Involve stakeholders in asking your clients and employees what they expect from the project. Most of the time, required deliverables should be more than simply ROI (return on investment).
- Keep stakeholders updated throughout the project.
- Dedicate resources to ensure the best people work on the project. This may mean engaging independent specialists to fill skills gaps or shoulder some of a team member’s regular workload to free up time to focus on the project.
Most project management methods used today were developed in the 1970s to 1980s. These practices reflect a time when companies focused on squeezing more efficiency and productivity from operations. So, project managers focused on inputs and outputs such as planning, cost, and risk management.
These components are still important, but the organizational change projects required today must emphasize outcomes and value—that is, the project’s purpose, benefits, and impact. Here’s where using outdated methodologies on modern projects falls short.
Thinking one size fits all
Since historically everything was seen as a bunch of inputs and outputs, project managers often applied a standard methodology, such as Agile, to all projects. But building a new feature for an existing product requires different project management tools and skills than pushing forward DE&I (Diversity Equity and Inclusion) initiatives.
Depending on a project’s type, level of uncertainty, and complexity, project managers benefit from using different tools or a combination of tools. The Agile approach is great, but it’s not always appropriate. A project management toolbox should include a variety of methodologies and tools such as lean startup, design thinking, change management, and Six Sigma.
Expecting a linear path
Traditional project managers also think of projects in life cycle stages, moving sequentially from initiation through planning and implementation to closing. But projects aren’t always naturally sequential.
Many projects today involve work that’s never been done before. Such projects will involve experiments, false starts, and failures. Instead of moving in a tidy, linear method, teams may zigzag back and forth across life cycle stages.
Traditional project managers consider projects as successful when they’re completed on time, and within scope and budget. They often wrongly assume that by sticking to the plan, the project’s benefits—the value it’s intended to provide—would naturally follow.
That’s why Nieto-Rodriguez believes the linchpin to improving project success is holding project managers and senior leaders accountable for delivering project benefits. After all, what’s the point of developing a new app if no one uses it? What’s the point of creating a new product that no one buys?
For many organizations, knowing all these reasons projects fail doesn’t mean they can start fixing and updating their way to greater results. Many organizations have more projects than people. Sure, they can create a better way to execute projects, but a more pressing question remains.
Who’s going to do the work?
Organizations are sensitive to how many employees may be teetering on burnout. Many teams feel the relentless pressure of getting more complex work done in limited timeframes. This was already an issue given the high rate of technology change, but it has become even more difficult amid the current talent shortage. Adding more projects onto workers’ plates may send them over the edge.
Managers should be careful even when workers volunteer to take on additional projects. One study using neuroscience and AI showed that when given extra responsibilities, workers’ stress levels rose by more than four times. And they were more than twice as likely to feel burnout.
However, some organizations, including the NBA, figured out a way to increase output and still protect top performers from burning out. They’re using a practice called load management. The concept came from the utility industry as a way to maintain output while preventing brownouts during peak usage.
Kevin Scott, Head of Technology at PGA of America, practices load management by giving the team broad access to engage independent talent through Upwork. This could be anyone from a PowerPoint specialist to update a presentation to a React.js developer to test proof of concept.
Scott basically told each engineer he expected “superhuman amounts of work” from them and it was up to them to figure out how they were going to get it all done. “That actually worked unimaginably well,” said Scott. The team completed projects three times faster at half the cost compared to their traditional means.
“Freeing up their bandwidth enables them to put their energy across what’s more valuable, so they can create bigger improvements and changes that help themselves and the team. And at the same time, they were just cruising through work.”
—Kevin Scott, Head of Technology at PGA of America
Liz Elliott, Technical Project Manager at PGA of America, agrees. She said, “Having high-quality talent available lets me focus on high-visibility projects while knowing the other projects are getting done and their stakeholders are receiving the support they need.”
Why you must handle projects better now
During the 20th century, most work activities were centered around operational efficiency, such as increasing automation and volume to make things better, faster, and cheaper. But that’s changing as artificial intelligence and robots increasingly take over operations.
Despite how quickly technology is evolving, productivity gains are slowing down. That’s why in the 21st century, projects of value center on organizational change. As such, the work is more complex and can’t be done by one person with a specific job description. Instead, the work requires collaboration with cross-functional team members who come together on a project basis.
Nieto-Rodriguez predicts that over the next few years, “Organizations will shift their focus more than ever to projects and project-based work instead of roles and their job descriptions. Projects are the new norm for creating value and, indeed, for staying in business.”
He calls this new future the project economy.
We’re already jogging briskly toward the project economy. Remember, it’s estimated more than 3% of the global labor force will be project management related roles by 2027. That’s right around the corner.
Organizations that succeed in the project economy are those that know how to manage their projects well. You’re ahead of many organizations in that you know where to start making improvements. When you need help, you can engage highly skilled project managers and other independent professionals through Upwork. You have the resources; now is the time to get started.