The 8 Most Common Reasons Projects Fail (and How to Avoid Them)

When we hear about project failure, we’re often surprised at the scope and magnitude. It happens in the largest organizations and on the biggest stages. We’re left wondering, with all that brainpower and money behind a project, how can it not come to fruition?

You’ve probably seen it played out before. Everybody’s excited to take on a project. Research is conducted, a team is assembled, and work gets underway. Project planning is done and key deliverables are set.

As things progress, however, it becomes clear something’s not right. Deadlines are missed. Things don’t work. Everybody soon becomes unhappy and starts trying to cover their behinds. It can get ugly and expensive.

What contributes to unsuccessful projects? We’ve identified some of the ways that projects get off track -- which can sometimes lead to spectacular failures -- as well as the lesson learned and what you can do to overcome them.

8 most common causes of project failure:

• Fuzzy objectives
• Unrealistic expectations
• Poor measurement or testing
• Poor resource planning
• Scope creep
• Conflicting cultures
• Poor accountability
• Lack of transparency

1. Fuzzy objectives

It sounds trite to say you have to set clear, focused objectives, but that’s why most projects fail. They either fail to identify critical issues in project development or lack clarity. Project scope is fundamental to successful projects.

Microsoft has had a string of successful product launches but it missed the mark on Windows Vista. It delayed the software launch repeatedly, and users found that a lot of existing software wasn’t compatible. Designers had failed to lock down a firm set of strategic objectives. While focusing on features, they failed to deliver on the big objectives.

Lesson learned: Establish focused and clear goals. Keep everyone’s attention on the big picture. Consider using project management software to track objectives and milestones.

2. Unrealistic expectations

Another key reason projects fail is unrealistic expectations. If the project plan is too optimistic or not grounded in reality, it can get messy quickly. This happens often when various stakeholders have differing views on what they think the project will accomplish.

In 2000, AOL and Time Warner decided one of the largest media mergers in history would better position both companies in new media. Because they had unrealistic expectations, this $182 billion stock and debt deal led to a $99 billion write-down just a year later.

Lesson learned: Set realistic expectations and get buy-in from key stakeholders so everybody is working off the same page.

3. Poor measurement or testing

In producing project and process deliverables, there needs to be a constant emphasis on measurement and testing to ensure the project meets its goals, perhaps as part of a project quality plan. When problems are uncovered, they need to be addressed formally.

Canada’s Phoenix pay system is a classic example of failure to measure, test, and address. After the system launched, auditors uncovered there had been no end-to-end or security testing once the software was compiled. Some 20% of the functions didn’t work properly. Even after these discrepancies were discovered and allegedly patched, retesting didn’t occur. It’s not surprising that the project was deemed a failure and scrapped.

Lesson learned: Create interim testing and measurement phases to assure projects are staying on track and meeting goals. Don’t wait until the end.

4. Poor resource planning

Even the best plans can get bogged down by a failure to assign adequate resources. The move to agile and lean processes can easily fail to account for what’s needed to get the job done.

The National Health Service in the UK sought to overhaul its IT systems in-house but failed to provide the resources necessary to complete the task efficiently. Although it realized the problem, the healthcare system refused to bring in additional resources or go outside the organization for help. As a result, it opted to abandon the project after spending 10 billion euros of taxpayer money.

Lesson learned: When developing your plan, pay particular attention to resource management and capacity.

5. Scope creep

As projects progress, it’s easy for scope creep to settle in. This happens when project stakeholders try to add a few more things to the initial design and fail to anticipate the impact. It can happen when you don’t set clear parameters from the outset or you keep adding to the deliverables.

Scope creep is a major reason the Berlin Brandenburg Airport wasn’t completed for more than a decade after its original completion date and ran 4 billion euros over budget -- despite 15 years of pre-construction planning. Conflicting visions by stakeholders diluted the original goals.

Lesson learned: Manage any additions to project deliverables carefully through scope management. Don’t allow new items to overshadow important goals.

6. Conflicting cultures

When project teams aren’t moving in the same direction in the same way, it can lead to clashes that can derail projects.

On paper, the acquisition of Nextel by Sprint was a big winner. As the two companies tried to merge operations, however, there was constant friction between the regimented and formal culture at Sprint and the entrepreneurial and relaxed approach at Nextel. Within three years, Sprint had written down 80% of Nextel’s value and shut down Nextel operations completely just a few years later.

Lesson learned: Before beginning any project, make sure there’s a cultural fit between entities. This includes companies, project teams, and team members. Your project communication plan has to account for organizational culture.

7. Poor accountability

Poor project management often leads to poor accountability.

After spending $134 million, the project to replace California’s DMV computer system was scrapped in 2013 after seven years of work. It wasn’t the first time this had happened. A previous effort in the 90s was also terminated after $44 million was spent.

While we can point to an astonishing number of faults in the planning and execution of these projects, one of the biggest was a stunning lack of accountability to deliver on objectives.

Lesson learned: Accountability throughout every phase of the project is essential. Create milestones and checkpoints to meet goals.

8. Lack of transparency

Failed projects often display a lack of transparency that is obvious in retrospect.

The Airbus A380 project is a classic example of poor communication and lack of transparency by project teams. Engineers across the company worked to design parts for what would be the largest passenger plane ever built. There was just one problem: When the parts were shipped to the assembly plant, many of them didn’t fit together. Engineers had been using different CAD programs with different sets of measurements.

Lesson learned: Eliminate the communication gaps to facilitate exceptional transparency into every aspect of the project.

Even failed projects produce insights

IBM engineers in the 50s set out to design the world’s fastest supercomputer. The result was the IBM 7030 (nicknamed “Stretch”), which was 40 times faster than anything else in existence. IBM budgeted $13.5 million for the project and completed it on time for less than $8 million. The company, however, deemed the project a failure because it didn’t meet the goal of creating a computer 100 times faster.

Yet, project failure analysis uncovered an amazing assortment of processes and techniques developed during the project, including memory interleaving and protection, that would have a lasting impact on the development of micro-computers for decades.

Remember that even in projects that don’t meet objectives, there are likely lessons to be learned that can improve your work in the future.