Top 10 Reasons Why Projects Fail (And Their Solution) 

Reasons Why Projects Fail

Before we embark upon the journey of project failure, its reasons, and solutions, I am going to mention one of the quotes related to project management to lay the foundation of the article.

“Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford.

We’ve all experienced it.

You become tremendously excited about a project at first. You do your homework, make a thorough plan, assemble a capable team, and kick-start your work.

Then, suddenly as you move ahead, everything starts falling apart. Deadlines are not met. Deliverables fall short of expectations. Customers and supervisors are, to put it mildly, disgruntled.

Simply put, it’s a disaster.

Although you are not alone in trying to escape from this array of project failures, simply reading this article indicates that you have already taken a crucial step. So here’s to planning beforehand and avoiding frequent project hazards.

When is a project considered a failure?

I have been asked this question many times, and it’s hard to give a concrete definition of project failure.

The thing is that a failed project for one organization might not be the same for another one.

Why? Simply because the definition of failure can vary from project to project, organization to organization, and so forth. Even a complete project can be labeled a failure if it does not meet the ROI target.

A project may be labeled a failure for the reasons listed below:

  • The project failed to achieve its goal.
  • You did not receive the desired deliverable.
  • The work wasn’t finished on time.

Like I said before, failure is a tricky term. Even if you miss a deadline or don’t meet a target, “failed” projects might nonetheless produce major benefits. While failure is never pleasant, it frequently occurs when ambitious goals are set.

For example, we at ProofHub believe that if your success rate is 100% all the time, you most likely did not plan ambitiously enough.

However, it is critical to ensure that projects fail for the correct reasons, such as creating a stretch goal to stimulate forward momentum, rather than an avoidable trap.

Project Management workflow

A look at project failure statistics

Every project, regardless of industry, requires project management software. Its significance is more apparent today than ever before.

Things in the workplace are prone to go away without project management. These key project management statistics for 2022 can be quite eye-opening.

When reading these statistics, it doesn’t matter where you are in the project management chain. It can, however, show the importance of project management to the global and industry-wide influence it has.

  • Companies that lack effective project management delivery systems are more likely to miss deadlines and overspend.
  • 67% of projects fail because project management is undervalued.
  • Approximately 44% of all managers do not believe in the importance of project management software.
  • Only 46% of firms place a high priority on project management.
  • Using a good program reduces the likelihood of project failure by 10% and reduces the likelihood of scope creep by 17%.

Why do most projects have such a high failure rate?

Projects fail for a variety of reasons. The most prevalent reasons for project failures, according to Project Management Institute research, include changes in organizational priorities, improper requirements collection, and changes in project goals.

Why Do Most Projects With Such High Potential Fail

10 Reasons why projects fail and their solutions

Before we study the most common reasons projects fail, it is to be understood that each project is different. 

This means that reasons for project failure are not necessarily the same for any two projects, though there might be a few common causes for a project’s downfall. 

On a brighter note, you can work on each reason for project failure to make your next project a successful one.

Here are ten reasons we’ve discovered to persist in poorly run or unsuccessful projects. The solutions are listed after that.

1. Unclear goals and objectives 

Do you know that an estimated 37% of projects fail due to unclear project objectives and milestones?

How can you expect your project to be successful when you do not set clear-cut goals and objectives for your team to work on? At ProofHub, this is the first and essential step whenever we have a new project in our hands.

Unfortunately, not all teams follow suit. 

Businesses that fail to set out clear goals and objectives for employees waste a significant chunk of their time and efforts. Following are the effects of vague project goals and objectives. 

  • Unclear objectives lead to unclear operational methods
  • The quality of performance can be justified on an individual basis
  • One does not realize when the project veers off the track until the last moment
  • People involved in a project cannot perform with maximum effectiveness

2. Lack of resource planning

Resources in project management refer to men, money, and materials. What are you supposed to do without adequate resource planning for project management?

If you’re not using a good task management tool, then it’s likely that your human resources are either being under-utilized or overworked.

You’ll fail to notice that some of your team members are working on too few tasks while others are working on too many tasks simultaneously (remember the side-effects of multitasking?). 

Financial planning is another important aspect of project resource planning. Projects with poor cost estimations and irregular tracking will likely surpass their original budget.

Project managers who don’t know how to track and manage finances are likely to push the project to failure. 

3. Poor communication across the organization

PMI (Project Management Institute) says that poor communication leads to project failures one-third of the time.

Another worrisome fact for organizations is that 56% of budgets allocated to projects are at risk due to poor communication.

Teams that face communication delays, or the lack of it, will experience trust and transparency issues. 

The main reasons for communication failures across organizations can be attributed to: 

  • Absence of communication policy
  • Lack of stakeholder engagement
  • Lack of mutual understanding among employees
  • Project managers assume that communication has taken place when it doesn’t

The effects of poor communication within the workplace can have devastating effects on the project in the form of- poor collaboration, loss of productivity, stressed employees, unhappy customers, and mistrust in the workplace, amongst others. 

Whether it’s delayed communication, lack of communication, or no communication at all, the fact is that without an effective communication strategy, your project is likely to fall through the cracks. 

4. Inadequate stakeholder management

Stakeholders have an inherent interest in the project, either for good or bad of it.

It is the responsibility of project managers to identify all stakeholders and communicate with them on time, without any delays. Not doing so can increase the likelihood of project failure.

There are many reasons for poor stakeholder management, and some of the most common ones are mentioned below. 

  • Defining stakeholders too narrowly
  • Failure to maintain a balance between compliance and strategic opportunities
  • The tendency of company executives to get defensive too quickly in the face of negative comments
  • Hiding self-interest 
  • Stakeholders are taking away resources prematurely
  • Lack of interest from stakeholders
  • Stakeholders are unaware of the project’s progress

Engaged stakeholders offer support and insights to drive your projects toward success, but disengaged stakeholders may become barriers to success.

5. Poorly defined project scope

The project scope outlines everything you’re going to do (and not going to do). Scope creep in project management refers to uncontrolled, continuous changes in a project’s scope.

Generally, a poorly defined project scope results in scope creep, where the former is vaguely defined, documented, or controlled. 

Scope creep is seen as a negative occurrence, which should be avoided. A project with a poorly defined project scope has more chances of failing and experiencing a range of problems, like: 

  • Failing to meet client expectations
  • Continuous changes being requested throughout the project course
  • Major changes are required during the project life cycle
  • The budget goes beyond the allocated budget
  • Failing to adhere to deadlines

Poorly defined project scope invariably results in poor employee performance, poor client accountability, longer timelines, and higher project costs.

6. Inaccurate cost and time estimates

Inaccurate cost and time estimates are often the vague guesses of team members who calculate the expected duration of tasks and the project’s cost based on an average duration of time and cost it took for previous projects.

While this method of calculating estimated task duration and cost may turn out to be accurate, it can also lead to completely inaccurate estimates. 

This can cause all sorts of trouble for employees who are assigned tasks and asked to complete those according to estimated times.

When tasks aren’t completed in line with the estimated time, employees have to face the ire of the senior management for no apparent fault of theirs. 

Inaccurate estimates are often the result of two underlying causes:

  • Upfront planning
  • Poor estimation practices

7. Inadequate risk management

Risk management enables project managers to detect and analyze concerns that may arise during the project and hinder its progress.

If you are not managing risks effectively, there are good chances that they might appear during the later stages of the project and cause major scope creep.

Poor risk management can result in a delay in the project schedule, poor user adoption, late-running projects, overspent budgets, and project failure. It’s a fact that no project goes perfectly, and things can go wrong.

Projects have a certain degree of uncertainty about them, and having a risk management plan can lower the uncertainty besides increasing the likelihood of completing your project on time.

Also check out – Best risk management software to mitigate risk

8. Inexperienced project managers

How can you expect a rookie project manager to take charge and ensure your project is executed and delivered successfully?

No way I am saying that new project managers don’t have it in them, but it’s just that their inexperience in handling projects does increase the likelihood of project failure as compared to a seasoned and resourceful manager. 

And then, some organizations don’t take project management seriously and think that anyone can manage a project. As a result of this lackadaisical approach, many assistants or consultants are made accidental project managers without any credentials to their name. 

They might be excellent in their discipline, but minus experience in project management, they can be one of the main reasons for your project’s failure. 

9. Unrealistic expectations

When it comes to project management, it’s not expectations but unrealistic goals and objectives that can spell doomsday for projects.

Often disguised as optimism, unrealistic expectations have caused the downfall of many projects. This situation occurs when project managers fail to analyze (accurately) the strengths, skills, and competencies of every team member. 

As a result, employees are overburdened with tasks that they might find difficult to complete in time.

You should know what your team can do and in what time frame. Your expectations should be realistic, i.e. they should sync with your team’s capabilities. 

10. Monitoring and controlling

Monitoring and controlling the project is perhaps one of the less understood facts that project managers and their teams are not paid adequate attention to.

You don’t need to be a rocket scientist to figure out that you should “track, review, and regulate the progress of the project; identify areas that call for changes in the planning, and initiate the corresponding changes.

Every attempt should be made to ensure that the project stays on track, and when it falls behind on budget or schedule then the plan should be changed to get the project back on track.

Many project managers create a schedule only to never update it. Even if they update a schedule, it is just to fill in the percent done, which is an erratic figure often picked out of nowhere by the team member.

3 Notable project failures examples and lessons learned

When massive projects fail, they make headlines — and occasionally end up in history books. Their findings are useful for every manager:

What mistakes can undo all of your hard work and should be avoided?

What difficulties might be expected at different stages of a project and how to deal with them?

Here’s a look at three of the most well-known project failures from the past and today.

1. Edsel by Ford

This ambitious endeavor by Ford is one of the most notable historical failures: a brand-new car named after Henry Ford’s son, significant market research, dedicated production facilities – and, as a result, enormous expectations.

However, by the time the study was completed and the car was unveiled in 1957, the market had already turned to tiny cars, which Edsel was not.

Lessons learned: While rigorous study and elaborate development are important, it’s always important to keep in mind the speed of market dynamics. Slowing down a project implies losing out on market chances.

2. New Coke

The advertisement claimed that “America’s taste just got better.” Coca-Cola discovered that individuals preferred the new taste to the traditional one after testing the new recipe.

That was unsurprising: the new beverage was supposed to taste more like Pepsi, which was gaining momentum on Coca-Cola. Coke has been reintroduced. I mean, what could possibly go wrong?

Nope. Because the new beverage didn’t sell as well as predicted, Coca-Cola reverted to the old formula.

Lessons learned: if something works, leave it alone! There was nothing wrong with the original product, thus “improvement” was needless.

3. Berlin brandenburg airport

Finally, but certainly not least. The most recent and important example of systematic project failure is the third Berlin airport project.

Scope creep, unplanned modifications, a large number of stakeholders with disparate interests, and poor communication combine to make it a typical example of how large projects fail.

Lessons learned: all areas of project management are crucial, and if many of them are managed poorly or not at all, the project will fail – even if it appears to suit the needs of a large number of people.

What can be done to minimize project failures?

Minimize Project Failures

Even the darkest of clouds has its silver lining. While failures are part and parcel of project management, you can always learn from your mistakes to succeed in the future.

The key to success in project management is never to repeat the same old mistakes of the past. The Sooner you realize it, the better it will be for you, your project, your team, and the entire organization. 

So, let’s find out how project managers can ensure that their next project is executed as planned and any potential problems are identified and resolved before they get too big to cause a potential project failure. 

1. Plan diligently

As a project manager, look at the bigger picture. While project planning can take time, the results are worth every minute you spend on it.

Yes, there can be eagerness on the part of project managers and stakeholders to get started with the project, but if you plan right then you’ll see how easy it gets for you and your team during the execution stage.  

Project planning requires comprehensive analysis and structuring of the following basic steps:

  • Setting project goals
  • Determine project deliverables
  • Creating project schedules and milestones
  • Creating supporting plans
  • Task assignment
  • Risk Assessment 

2. Identify loopholes

Identifying problems with the project before they get out of hand isn’t as big a challenge as it is made out to be. Taking your team members into confidence is the key here.

Ask your project team members to be upfront with what they think can be some potential loopholes in a project that can deviate it from the track. 

Interview key team members to find out the business drivers [for the project], the political environment, organizational barriers, and what worked well in the past,” says Rob Prinzo, CEO of project management training and consulting firm The Prinzo GroupThey’ll tell you what’s wrong with the project.” 

3. Check your resources

Your team or organization has limited resources (people, space, technology, equipment, money), and you have to execute your project from these.

This is where smart project managers use resource management to organize and utilize those finite resources to successfully steer the project home.

Project managers can use the following tips to identify the right resources for your project. 

  • You and your client should have a common understanding of what work is to be done in the project
  • Identify what human resources are required for the project, and for how long, and check their availability
  • Identify all facilities (office space, desks, computers, software, production areas) that are required and arrange them before the project starts
  • Check the skills of the participants to assess their strengths and weaknesses

4. Set realistic expectations

Being optimistic about project outcomes is never a bad thing. However, unrealistic expectations can hurt both your employees and the project big time.

Many project managers are perhaps more optimistic than required, and it’s easy to cross the line in excitement and set unachievable deadlines or over-the-top goals.

Push aside your excitement and eagerness, take a deep breath, and look at this project and your team realistically. Focus only on achievable goals and give yourself and your team enough time to achieve that.

You can check the progress of the project by using an accurate and reliable time management tool that will help you bring all your time data into one place.

5. Track project progress 

Tracking your project progress at every stage is crucial to determine whether or not your team would be able to complete it within set deadlines. You need to clearly understand who is working on what tasks are being completed on time and which ones are not. 

Don’t go by your gut instinct on anything. Every minute detail, every activity has to be recorded in a single location that can be accessed easily anytime. Using Kanban Boards and Gantt Charts inbuilt in great project management software is a great way to have a visual timeline of your project and adjust to goals or deadlines accordingly.

6. Communicate well, communicate often  

We’ve read about how poor communication is one of the primary reasons for project failures. Unless all team members, clients, and external stakeholders are on the same page, it’s near impossible to collaborate well.

So, it’s imperative to ensure swift communication lines to ensure uninterrupted workflow as well as avoid any type of misunderstanding among team members. 

As a project manager, you should be easily accessible to your team members and encourage them to not hesitate in coming up with new ideas, suggestions, and concerns. Also, you should define communication modes for exchanging different types of information.

For example, Video calls for team meetings, phone calls for a quick conversation, emails for official communication, and Group chats for quickly sending and receiving direct messages. Make sure that you let your team members know clearly about the time you will be available for communication and otherwise.

You don’t want someone to ring you when you are having dinner with your family, right?

7. Use the correct methodology

Your methodology selection can prove to be a vital cog in your project management and its result. As a project manager, it will be one of the important decisions you will take as it will have an intense impact on teamwork. That said, different project management methodologies have their pros and cons.

You should carefully choose the right PM methodology based on your project type and scope. Given below are some examples of top-rated project management methodologies.

  • Waterfall method
  • Hybrid approach
  • Agile/Scrum
  • Critical Chain Project Management
  • Critical Path Method (CPM)
  • Integrated Project Management Technique

There’s no single PM methodology that can suit every project. So, you should understand the project requirements and select the one that best suits your project.

How ProofHub can assist you in avoiding project failure

You have already read about some of the most common mistakes that can cost your project dear. The good news is that there is a solution to every problem. Hard work, planning, learning from past mistakes, and having the right project management tools is the only way to deliver your project successfully.

A solid project management software can help you get past the question of why projects fail and focus on completing your projects successfully.

ProofHub is an award-winning team collaboration and project management software that offers all the right tools to keep your project and team members in check from a single location.

ProofHub, with its gorgeous visual tools and built-in communication channels, can assist you in making your next projects more successful.

Try ProofHub, our powerful project management and team collaboration software, for free!

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