Maintaining a healthy, balanced project portfolio is not easy! As projects are often interdependent, problems with one project, or even project failure, can quickly impact other work.
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Regular monitoring of your portfolio will make it easy to spot projects that are in trouble and take action.
In this article, you’ll learn more about common causes of project failure and how to recover a failing project. In some instances, a project cannot or should not be put back on track so we’ll also cover how to end a failing project.
9 Common Reasons for Project Failure
Every project, team, and organization is different, as are measures of success and failure.
Using a project and portfolio management solution like BrightWork simplifies cross-project reporting with roll-up dashboards and RAG (Red, Amber, Green) reporting.
Using these dashboards, you can find a problematic project and drill down for more details.
Below are nine common reasons for project failure to look for in a project site.
1. Poor Project Planning
The project plan defines key elements such as the goals of the project, scope of work, resources, and metrics of success.
In addition to the project plan, other documents such as the Project Charter, Work Breakdown Structure, and RACI matrix add further context to the project. Together, these documents should generate a realistic schedule and clear roles for each team member.
Lacking a plan or burdened by an unrealistic plan, project teams quickly flounder.
Look out for: A poorly defined project plan, unclear tasks, and an unrealistic timeline.
2. Scope creep
Project scope management ensures that the project includes all the work required, and only the work required, to complete the project successfully.
Scope creep occurs when small changes are continually made to the project during execution. Scope creep can start during the planning phase if goals are unclear or stakeholder requirements are not understood.
Look out for: Vague or undocumented requirements and a constant stream of ‘small requests’.
3. Lack of clear, measurable goals
What is measured can be managed and improved. Trying to manage a project without a clear goal, measured with objective metrics and KPIs, makes it impossible to track progress and stay on course.
Goals also keep project teams on track, providing context and purpose to all work. An uncertain team can’t deliver their best work on time.
Look out for: An absence of metrics and KPIs in a project site and reports.
4. White-space risk
White-space risk refers to any tasks or activities not identified at the start of the project. Sometimes, we don’t know what we don’t know. Inevitably, something will not be included in the plan or could be more difficult than anticipated.
Look out for: A tight schedule with no ‘buffer’ time for testing or unexpected delays.
5. Unexpected changes in resources
Changes in resources include:
- People leaving the project (or company).
- Re-assignment of subject-matter experts to other teams.
- Shortages of physical resources.
- Issues with third-party vendors.
Without the right people or skills, delivering the expected scope of work becomes very challenging!
Look out for: Failure to adjust the project plan and deliverables when resources allocation changes.
6. Rising costs
Similarly, if costs rise too quickly, a project may become unviable. In some cases, fluctuating costs can have an external trigger, such as increasing costs for materials or outsourced services.
In other instances, project costings can be inaccurate from the start.
Look out for: Constant adjustments to the budget, including requesting more money during the early stages of execution.
7. No strategic alignment
Key to project portfolio management is selecting projects to support strategic goals. Every project should add value to the business in some way.
Without an objective way to assess and approve new project requests, it’s too easy to waste time and resources on low-value projects.
Look out for: A lack of clarity around the desired business value and how the project fits into the ‘big picture’.
8. No standard processes or templates
Trying to manage a project without a standard tool or approach quickly leads to missed deadlines and poor quality deliverables. Risk management and reporting are impossible without a single source of truth, making it harder to spot warning signs earlier.
Look out for: Lack of visibility into tasks and resources, and a reliance on tools such as email and Excel.
9. Poor project sponsorship
The project sponsor is typically responsible for initiating and approving the project and supporting the project manager during execution. The project sponsor has a varied role, providing help with everything from the business case to resource management, change requests, issue management, and key decisions.
Both KPMG (2010) and the Standish Group (2012) identified the absence of a project sponsor as the principal reason for project failure. If the project sponsor is not engaged with the project, is too busy to help, or doesn’t have the right level of influence, the project could be at risk.
Look out for: An absence of feedback from the project sponsor and difficulty with scheduling meetings to discuss the project.
So far, we’ve covered some common causes of project failure. Next up – what to do if a project is heading for trouble.
How to Recover a Failing Project
Before jumping into an action plan for a failing project, step back and ask if the project is worth saving. No one wants to walk away from a project; however, the desire to finish a project can often outweigh the benefits of the project.
Look at current and upcoming high-value projects that would benefit from extra resources. Consider if some elements of the project so far can be re-used elsewhere. Finally, ask if the proposed outcome is still relevant to the company and the market.
The answers to these questions may be immediately obvious or require some digging into the project itself.
If the project can or should be salvaged, you need to act quickly to make the project viable again.
Depending on the scope of the project, this assessment can be carried out by one individual, a recovery team, or outsourced. The duration and complexity of the assessment will depend on how many people are involved.
Below, we’ll look at three key questions you can use to understand the project clearly and quickly.
Gather data from various sources including project reports, project documents, and interviews with the project team. If the team is using a project management tool, this process will be smoother – if the site has been maintained throughout the project!
1. Are the problems internal or external?
You need to clarify if the source of the problem is internal (possible to correct) or external (outside of your control).
Take time to review project documents like the charter, plan, and schedule for:
- Clearly defined requirements from relevant stakeholders.
- A realistic schedule with achievable milestones.
- Resource allocation.
- A process of capturing and managing change requests.
- Unexpected costs (internal and external).
- Metrics of success.
- A process for maintaining quality standards.
Review contracts with vendors and any orders for materials to check for reourcing and finance problems.
It’s also important to identify any changes to the business strategy that could impact the outcome of the project.
2. Why are we behind schedule?
Next, pinpoint why the project is behind schedule.
- Were tasks prioritized correctly?
- Were tasks explained succinctly?
- Was the schedule too ambitious?
- How often did the project manager report on progress?
- Who made key decisions about the project?
- Is there an audit trail for decisions and change requests?
- How were risks reported and addressed?
- Was the original budget appropriate?
3. Is the team working effectively?
Finally, consider if the team worked together effectively.
- Did the team understand the purpose of the project, and their roles and responsibilities?
- Was the team using the same processes and tools?
- Did the team meet on a regular basis to share updates and challenges?
- Was a clear communication plan in place?
- Were the right people assigned to the project?
- Were there any issues with suppliers or vendors?
With this information, you can decide if the project should continue towards the original goal, continue with a smaller goal, or end. A helpful way to analyze the information is to identify threats (bad news), opportunities (good news), and problems (action areas).
Let’s take a look at a few key steps for continuing the project.
Project Plan
Firstly, a new plan is needed. To avoid making the same mistakes, the plan should:
- Be realistic, and manageable.
- Have a defined, limited scope.
- Include clear, detailed requirements with relevant outputs.
- Outline the revised budget and mechanisms for controlling costs.
- Have a stronger focus on critical tasks.
It’s essential for the team and stakeholders to understand the goal of the new plan. Spend some time working through assumptions, expectations, and unresolved tensions.
Project Reporting
Next, you’ll need to agree on reporting mechanisms with the project manager and team. These reports are not business-as-usual and will require increased commitment from the team.
Daily and weekly updates are needed – in-person, in a project site, and so on. The project manager needs to ensure everyone updates their tasks on daily basis. Introducing a daily huddle to share progress and blockers can help.
Another approach to reporting is the ‘inchstone’. If reporting takes place weekly, switch to daily. Likewise, if reporting is daily, move to hourly updates. Note – this is a time-consuming process that will not suit every team and project.
Regardless of the approach, track and re-plan with the project manager on a weekly basis.
It’s also important to use a backlog for new requests. The team can’t agree to anything new during this phase.
Lessons Learned
Once the project is completed, schedule some time to document lessons learned. A good habit for any project, it’s especially important for a project that almost failed.
How to End a Failing Project
In some cases, a failing project cannot or should not be saved. As mentioned above, a project may be deemed too expensive to continue or unlikely to deliver real business value.
Ending a failing project will likely meet resistance for several reasons:
- People worry about the impact on their reputation.
- The project may be close to completion.
- The team are too close to the work and are not reviewing the situation objectively.
- Management falls into ‘sunk-cost fallacy’, spending more money to recoup lost investment.
Whilst informing the team the project is ending is not easy, there are a few things you can do to manage the situation.
Open, consistent communication is key. Share the decision as soon as possible; ideally, in-person.
Be clear why the project is ending, including internal and external factors, the business impact, and costs.
Stay factual and don’t dwell on mistakes made by the team, vendors, or senior management.
Remind the team that we can all learn from failure. Fall upwards with a plan to improve future projects.
If you are using project management software:
- Update the project statement and relevant documents as needed.
- Reassign resources to other projects.
- Archive the site to ensure the project is no longer appearing in reports.
Editor’s Note: This post was originally published in December 2019 and has been updated for freshness, accuracy, and comprehensiveness.
