Article

Marina Pilipenko
Marina Pilipenko 30 October 2018
Categories B2B

Why Projects Fail

A project performed in strict compliance with the initial plan is uncommon. Risks are part of any project, and manager’s task is preventing them from causing failures. In this article, we’ll find out why projects fail and how to handle failure risks.

In real life projects rarely run as planned – it’s a sad but true fact. Failures happen, but they have their positive effects too. They are a source of valuable experience and lessons that help succeed in the future. In this article, we’ll take a closer look at the reasons for project failures, famous project failures and lessons learned from them, and general recommendations on how to avoid them.

Common Reasons for Project Failures

Each project is individual – which means that its risks and possible failure reasons are individual too. However, there are typical reasons of failures that can appear in any environment. And, while carefully tracking your project data to identify possible bottlenecks and vulnerabilities, it’s helpful to be aware of common situations that cause failure.

  • Scope creep

    Caused by various reasons, scope creep is the main factor that leads to the failure of a project. Unplanned changes, estimation errors and unexpected delays lead the team to being not able to deliver the agreed scope of work in the required time. That’s why careful planning and proper change management are critical for project success.

  • Resource allocation errors

    Understaffing and too much work undertaken by the team cause the resource allocation problem: too few people are working on too many projects or tasks at the same time. Not surprisingly, less work is getting done (we all remember about the harmful effects of multitasking), and projects eventually fail – not to mention accumulated effects on staff performance and work environment.

  • Poor communication

    It’s been said a lot about the importance of communication in project management, but teams and individuals still tend to deal with the lack of it. It’s not only about manager’s communication with the team, but about information exchange between team members too. This helps plan work better, detect possible bottlenecks, and prevent major problems.

  • Wrong estimates

    Accurate estimating means correct planning – but it’s not always possible. This is particularly true for non-trivial tasks and non-standard projects. Of course, even “guesstimates” sometimes can turn out to be accurate, but usually that’s not the case. So, increasing estimation accuracy and, if not possible, reserving time for increased work is essential for running and delivering a project.

  • Poor monitoring

    While it seems to be quite obvious that monitoring and control are important on each project stage, sometimes project still fail because this type of project work is not performed on early steps. Proper monitoring helps manage changes, adjust schedules and plans, and prevent scope creep and issues caused by it.

  • Micromanagement

    Micromanagement is not the same as thorough control – and its negative effects literally ruin team’s efforts to deliver a project on time. It invites lack of trust and destroys the idea of the agile teamwork and collaboration. Besides, it consumes barely affordable amounts of managers’ time that otherwise could be spent productively.

  • No risk management

    As we see, there are many of common reasons for project failures, and even more unique ones. A wise manager should detect and prevent them on early stages. Risks don’t just go away when ignored, and when no risk management is performed, they appear on later steps and cause major scope creep.

9 Famous Project Failures & Lessons Learned

When big projects fail, they end up in news headlines – or sometimes in history books. Their results turn into great lessons for any manager: what errors can ruin all the invested effort and should be avoided, what problems can be anticipated during different project phases, and how to handle them. Here’s a list of several notorious project failures of the past and present times.

1. Edsel by Ford

One of the memorable historical failures is this ambitious project by Ford: a brand-new car named after Henry Ford’s son, extensive market research, special production facilities – and resulting high expectations. However, by the time the research was done and the car was presented in 1957, the market already shifted to buying compact cars – which wasn’t the case of Edsel.

Lessons learned: With all respect to the importance of a thorough research and elaborate development, it’s always crucial to remember about the speed of market dynamics. Slowing a project down means missing market opportunities.

Note: “Failure is simply the opportunity to begin again, this time more intelligently,” Henry Ford said, and the Edsel failure eventually wasn’t a complete loss: production facilities built for it were used for producing the new line of compact cars.

2. DeLorean DMC-12

The famous “Back to the Future” car and one of the best-known project failures: the company and the project of its only car model suffered from various problems long before the first car was produced, and already at the early stages consultants forecasted a 1-in-10 chance of success. Eventually, this turned into quality issues, enormous delays, and financial problems. In 1982, John DeLorean, the founder, got arrested on drug trafficking charges, and even though he was found not guilty, it was too late.

However, DeLorean seems to be coming back: the new car is announced for early 2019, with improved the engine and faster speeds.

Lessons learned: big uncertainty already at the very beginning of the project, poor planning and lack of quality management are not really unexpected enemies of project success. Another lesson: in some cases, leveraging nostalgia and fixing critical problems of the past can bring the project back to life.

3. Microsoft Zune

In early 2000s, Apple took over the market of portable media players with its iPod, but Microsoft could not just accept this loss. Instead of admitting their defeat, they released their portable player, Zune. The player wasn’t a bad product itself – but it was overpriced, Windows-only, and, the most important, a product designed to chase the competitor. Predictably, it failed and was discontinued.

Lessons learned: sometimes it’s better to admit the defeat and find out market parts where you can deliver competitive products.

4. Virtual Case File

Virtual Case File, or VCF, was a governmental project of a software application intended to modernize the FBI’s outdated IT infrastructure. After five years of development and nearly $170 million consumed, the project was abandoned. FBI ended up facing strong criticism of the program, as it lost millions of taxpayers’ dollars and led to nothing.

Lessons learned: the project suffered from literally all kinds of software development failures: lack of technical architecture, scope creep, micromanagement, code bloat, endless specification changes, and much more. This case shows the importance of careful planning and strictly following the chosen methodology.

5. Apple Lisa

Lisa was the first desktop with a mouse – a technology that eventually took over the market. However, even expensive ads couldn’t convince consumers: the product was actually much less than the campaign promised, and people were not as interested as Apple initially anticipated.

Lessons learned: overpromising is not a way to long-term success. Being not transparent about the capabilities of delivered product destroys the project.

6. New Coke

“America’s taste just got better”, - the ads said. After testing the new recipe, Coca-Cola figured out that people preferred the new taste over the traditional one. That was not a surprise: the new product should taste more like Pepsi, to which Coca-Cola was losing ground. New Coke was released. Nothing could go wrong, right? Nope. People didn’t buy the new product as expected, and Coca-Cola went back to the traditional formula.

Lessons learned: if it works, don’t fix it! There was nothing wrong with the old product, so there was no need to “improve” it.

7. Crystal Pepsi

It’s remarkable how healthy food hype influences the “unhealthy” food market. In early nineties, PepsiCo released the new, “clear” version of their famous soft drink, claiming that it’s healthier than the traditional dark soda. We don’t know if that was true, but the fact is that people weren’t interested in buying it because the flavor wasn’t quite right… not to mention that healthy food fans usually don’t drink carbonated and artificially flavored beverages.

Lessons learned: bottlers warned PepsiCo that failure is highly possible. David Novak, the COO, later admitted that he learned this lesson: if people are bringing up issues, they might be right.

8. Segway Personal Transporter

What if you have a brilliant idea and a new technology? No, it doesn’t necessarily mean that you’ll be a pioneer. Maybe your product will be a flop – just like Segway: instead of turning into the next generation transportation, it faded away and was forgotten soon after its debut in 2001.

Lessons learned: if there are serious issues with your product, first detect and fix them. Consumers found Segway too expensive, cities banned it from sidewalks because of speed, and eventually, the product proved to be not viable.

9. Berlin Brandenburg Airport

And, the last but definitely not the least. The project of the third Berlin’s airport the most recent and relevant example of systematic project failure. Scope creep, unmanaged changes, too many stakeholders with completely different interests, poor communication – all this turns it into a classic example of how big projects fail.

Lessons learned: all aspects of project management are important, and if several of them are managed poorly or not managed at all, the project was doomed to fail – even if it seems to meet the needs of many.

Preventing Project Failures

Knowing what common failure reasons are, it’s easier to identify possible issues in the course of a project. Developing procedures that help avoid failures and mitigate their consequences is an important step of project planning. Here’s some advice on how to handle failure risks and what to plan in regard to failure risks:

  1. Make sure your plans, scope and deadlines are realistic. Use previous data is possible to forecast delivery time, work dynamics, and work parts that need extra effort or attention.
     
  2. Plan for monitoring procedures on all project steps. Develop or adopt standardized processes for that. The most common reason why failures are detected and recognized when it’s too late is not monitoring the process properly. However, as risk is an inevitable part of any project, it needs special attention on early steps, when it can be efficiently prevented.
     
  3. Use special work management tools to monitor the progress of your project and identify possible risk areas. The data collected by the team provides valuable insights into what parts of the project need close attention.
     
  4. Select a project management methodology that would work best for your particular project, follow its principles, and make sure your team members understand how it works and what roles each of them has in the entire process.
     
  5. Communicate. Plan time for communication within the project team, organize meetings (but remember of efficient usage of time), and encourage team members to bring up possible issues if they notice them.
     
  6. Make sure your team is not understaffed, workloads are reasonably distributed, and individual responsibilities are clear for each team member.
     
  7. Make sure that long-term goals are visible for your team and everyone understands how the project team is moving towards them.

Summary

It’s hardly possible to manage a project without facing any risks, but there are efficient ways to prevent these risks from causing project failures. Following established procedures and methodologies and adapting them to the specific project is a recognized way to handle difficulties and changing environments. And don’t forget about learning from previous failures – not necessarily your own ones.

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