Major public works tend to get most attention when new bridges or submarines are years behind schedule and billions of dollars over budget. How many of us shake our heads and wonder how so many projects run way over time or budget – or both – or simply fail to deliver?

Not all projects fail, of course, but too many seem to, in one way or another. So what are the root causes of these failures, and what needs to be done more, better, or differently?

The Project Management Institute cites problems with leadership and culture, scope and plans, funding and resources, monitoring and feedback, and communication as major reasons for project failures. Academic studies such as Pinto (IEEEng) also highlighted inadequate mission-aligned objectives, detailed plans, personnel, and client interaction.

Many project managers have told us the worst day of a project’s lifespan is the Project Kick-Off, when they have to “begin disappointing clients” because of one or more of the above!

So, why do many projects fail? From our experience there are ten key reasons.

10 KEY REASONS MANY PROJECTS FAIL

1.      Optimistic business cases

An old finance colleague of mine used a rule of thumb when reviewing business cases: double the costs and halve the benefits, as invariably optimistic clients will have not been sufficiently ruthless regarding either one.

2.      Rushed procurement

When deadlines have already been announced, the pressure to get the works underway is enormous. Procurement staff invariably fall back on contract types and even specific contractors who are most familiar to save time.

3.      Wrong contract type

Poor understanding of supplier imperatives can lead clients to attempt to force unnatural behaviours on them for ease of administration or naïve notions of transferring risk and knowledge. Bundling design and build, or build and maintain, for example, may seem a good idea but lead later to added work and costs.

4.      Lowest cost bidder

Procurement asking for high quality then accepting bids from less reputable contractors also promising low costs is sowing the seeds of later disappointment.

5.      Contract terminology

Contracts need to be defensible in court, but that can make them difficult for implementors to understand and cause friction with differing interpretations.

6.      Unclear expectations

The contract drafter may assume that everybody knows what they mean and fail to specifically say who should be doing what, where, when, and how.

7.      Insufficient performance management

Contractors are human and will typically put more effort into what they know will be inspected and measured. The contract needs to “have teeth” for the project manager to enforce it without having to resort to costly legal processes.

8.      Lax project management

Simply administering and reacting when things go wrong does not constitute good proactive project leadership and encourages contractors to take liberties.

9.      Scope changes during the project

Force majeure is, by definition, unable to be predicted, but any other change in scope or requirements reflects insufficient initial work and rigorous debate and should be left until a later phase or version.

10.  Too many assumptions

People naturally make assumptions, but no-one is perfect, so assumptions need to be spelt out, and validated by (another) expert. Better to be safe than sorry.

REDUCING PROJECT FAILURE

The best way I know to reduce project failure is based on a well-honed adage:

Spend more time up front to get it right

My grandmother knew that “A stitch in time saves nine”, and my grandfather encouraged us grandkids to “hasten slowly” to achieve quality outcomes. My father knew the value of proper preparation of surfaces before charging into the painting of our timber house, lest he be re-painting it much sooner than desired. Taking just a little longer in the earlier phases to set things up correctly will yield rewards during development and implantation when things go as expected.

Ask more of the right questions at every stage

I learnt early in my career that it was better to be yelled at for asking questions up-front than to be in much greater jeopardy later for delivering something that did not meet expectations! Sometimes it takes just one further question to unearth lots of useful information and avoid numerous misunderstandings and mistakes, and what is obvious to the speaker is not always so obvious to the listener.

Procurement, designers, and business analysts might ask more about stakeholders’ requirements, their urgency, their success criteria, and the projected use of the deliverables to ensure that what is provided will be “fit for purpose”.

Responding tenderers might be asked their priorities and appetite for risk, and they should ensure they understand those of the client.

Such questions will enable proper risk assessment, estimates, and options to be presented for consideration. Subsequent tenders, project plans, and contracts can then all reflect the same detailed description of who will do what, by when, how, to what standard, and for how much.

Project and contract managers who were not included in the early phases also need to asks lots of questions to ensure they fully understand the decisions made, the terminology used, and the processes committed to by participating parties. Their work of holding contractors to account will be more effective and less stressful when armed with complete documentation to begin with.

HOW DO YOUR PROJECTS STACK UP?

• So, how do your organisation’s projects stack up against our ten key reasons? Are they all on track for perfect delivery?
• Are your project and contract managers confidently asking all the right questions at each stage?
• Can you see areas for improvement?
• What could your people be doing more of up front to ensure “they get it right”?