A 2015 global construction survey by KPMG reported that in the last three years (leading to 2015), only 31% of all respondents’ projects came within 10% of the budget, and Just 25% of projects came within 10% of their original deadlines revealing that less than half of construction projects fall within 5% of their baselines, why is that?
Rachel Saunders on KPMG in the UK suggests that change management, leadership, and governance as well as strategic alignment and business case are some of the factors that are responsible for project failures. From Saunders’ point of view, it can be deduced that to minimize the chances of project failure, project stakeholders must develop detailed change management plans to support project governance and leadership.
Don't start a project and decide to change certain aspects of the project without first analyzing the cost and benefit structure.
Invariably, leadership and management commitment to established change control processes are both crucial for project success. Leadership should institute the decision-making process that management must follow to assess and decide changes to initial project requirements, especially where the degree of complexity is high, and project knowledge is limited.
For instance, one of the world’s most devastating drilling projects was the Deepwater Horizon project where BP, made some last-minute changes to the initial project plan without informing key stakeholders, that could have done a detailed evaluation of those changes to ascertain the impact and to accept or reject the change requests. The drilling project failed because the formal change control process was not adhered to strictly.
Again, Saunders’ mention of strategic alignment and business case as project failure triggers can be validated by the works of Turki Alsudiri, Wafi Al-Karaghouli, and Tillal Eldabi on Researchgate which shows that misalignment between large projects, and organization-wide business strategy leads to 30% of all project failures.
What is strategy, and how do we create alignment with projects?
Hunger and Wheelen (2003) defined the strategy of a corporation as a comprehensive plan stating how the corporation will achieve its mission and objectives (Alsudiri T. et al, 2012). In other words, every project an organization executes or intends to execute must make sense in terms of its mission and objectives; otherwise, the project may lose relevance and support from key stakeholders over time leading to its failure.
There should be a proper needs assessment for the intended project and a business case comprising feasible project options and recommendations. To avoid project failures, therefore, stakeholders should develop a workable project charter.
Let us examine the work of Discenza, Richard, and Forman, James B. on PMI.org that lists seven causes of project failure. In their conference paper, they emphasized the need for organizations to give more attention to business value than technical details for successful project delivery. They further mentioned that the project customer should be involved from the beginning of the project and continuously engaged throughout the project. That firms should establish clear accountability for measured results during project management.
What is the link here?
Firms must involve stakeholders in developing business documents for their projects. And this should be done throughout the project life-cycle whenever there is a need for change requests. So that key stakeholders are always kept in the loop to avoid project components that are not beneficial. In other words, to prevent project failure, key stakeholders should determine project benefits while the organization performing the project should provide the technicalities that can produce those benefits.
How is that possible?
The third point-accountability for measured results implies that firms should use the customer requirements that they gather to trace and develop key metrics to measure and validate project deliverables. Otherwise, failure will creep in, so from the beginning SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals should be created within project constraints (schedule, cost, scope, quality, resources, risk, etc.).
The paper also advised project performing organizations to maintain a consistent methodology for project planning and execution, implying that a project tends to fail when there is immaturity in the planning and implementation methodology. In simple terms, for an organization to succeed, it has to agree from the outset if it will adopt a predictive, adaptive, or hybrid approach in executing project tasks and follow the preferred methodology throughout the project life-cycle.
Other points raised by the authors include motivation and effective quality monitoring and controlling tools as determinants of project success.
Motivation in what sense?
Project failure could stem from leadership failure to inspire stakeholders with a clear sense of direction and the enabling environment to succeed. To explain this, Rosanne Lim on PM projectmanagement.com mentioned poor leadership as one of the ten core causes of project failure.
Other points raised by Lim, responsible for project failures, include disregard for warning signs, lack of resource planning, culture or ethical misalignment, little communication at every level of management, inaccurate cost estimates, inadequate documentation and tracking, and inexperienced project managers. This implies that effective quality monitoring and controlling tools alone, suggested by Discenza, and Forman are not enough to guarantee project success rather Shiv’s opinion, that taking the necessary actions when there are warning signs from these project indicators is what assures success. Lim’s position encouraged firms to start by creating a project-based environment that emphasizes project documentation and tracking, integrates diversity inclusion and equity, promotes effective communication, and prioritizes expert judgment in all planning activities. Her points also suggested that firms hire knowledgeable project managers who can implement the required mix of project technicality, leadership, and business acumen to succeed.
Leadership can also be seen in the way an organization positions its project managers to resolve conflicts. And project failures could result from lingering conflicts (resource allocation, interest, thought pattern, culture, etc.).
Shiv Shenoy gave five general conflict resolution strategies on PM Exam Smartnotes. Shenoy states that to manage conflict, the project manager who is ultimately responsible for the project success could avoid or withdraw to become more prepared to handle the issue or let time lessen it. Another way to resolve conflict which the project manager could adopt is to emphasize areas of agreement between the conflicting parties to strike a balance between them. Also, the urgency of an issue could require the project manager to enforce their personal opinion or consider those of the majority stakeholders. If the conflict requires a sacrifice to resolve, the project manager could also give up something. Shenoy and Lim’s suggestions infer that a project may fail if there is a mismatch between leadership or conflict management strategy and the problem at hand. It, therefore, behooves the leadership of the performing organization to apply expert judgment and lessons learned over time in resolving issues to maximize project resources.
In conclusion, the success of a project depends more on the body language of its sponsor(s). The more collaboration and effective communication among key stakeholders, the less likely the project will fail. Such collaboration is possible in a trust-driven project environment where leadership makes deliberate efforts to create and maintain a trust-based project atmosphere for the desired change.
KPMG International 2015. Global Construction Survey 2015; Climbing the Curve. KPMG. https://assets.kpmg/content/dam/kpmg/pdf/2015/04/global-construction-survey-2015.pdf
Saunders R. (2019, February 19). Common drivers of project failure: what can internal audit do? KPMG in the UK. https://home.kpmg/uk/en/home/insights/2019/02/common-drivers-of-project-failure--what-can-internal-audit-do-.html
Kunzelman M. The Associated Press (2013, April 15) BP manager recalls frustrations with last-minute changes before deadly explosion on Gulf rig. CANADIAN BUSINESS. https://www.canadianbusiness.com/business-news/bp-manager-recalls-frustrations-with-last-minute-changes-before-deadly-explosion-on-gulf-rig/
Alsudiri T., Al-Karaghouli W., and Eldabi T. (2012, June). AN INVESTIGATION OF ALIGNING PROJECT MANAGEMENT TO BUSINESS STRATEGY: A REVIEW AND CONCEPTUAL FRAMEWORK. EMCIS, Munich, Germany. https://www.researchgate.net/publication/322656568_AN_INVESTIGATION_OF_ALIGNING_PROJECT_MANAGEMENT_TO_BUSINESS_STRATEGY_A_REVIEW_AND_CONCEPTUAL_FRAMEWORK
Discenza, R. & Forman, J. B. (2007). Seven causes of project failure: how to recognize them and how to initiate project recovery. Paper presented at PMI® Global Congress 2007—North America, Atlanta, GA. Newtown Square, PA: Project Management Institute.https://www.pmi.org/learning/library/seven-causes-project-failure-initiate-recovery-7195
Lim R. (2021, July 01) Top 10 Main Causes of Project Failure. PMprojectmanagement.com. https://project-management.com/top-10-main-causes-of-project-failure/
Shenoy S. (n. d.) How to Manage Conflicts on Projects: 5 Proven Ways! PM EXAMSMARTNOTES. https://www.pmexamsmartnotes.com/how-to-manage-conflicts/
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.