10 Project Failures and the Lessons Learned

The world of project management has changed over the last twenty years to meet the changing demands required by organizations, who are applying leaner operation models with fewer resources, risk adverse, project constraints and restricted budgets to deliver projects. Consequently, the need for management within organisations is to focus on choosing the right projects to add business value, benefits and return on investment is more important now than ever before. Academic and industry research confirms that there is still a high level of project failures across all industry sectors (Average success rates are at 30% while failure rates are at 70% according to Project Management Institute Studies and Standish Reports 2015).

Pinto and Mantel (1990) describe the attempt to gain a more complete understanding of the causes of project failure has been a difficult task for both academic researchers and practitioners. First, the concept of project failure is nebulous. Few people agree on exactly how to define project failure. However, in his research Dunbar (2016) states that the Project Management Failures-Standish Chaos reports (1994-2015) concludes that over the last 20 years the project management field has experienced increasing layers of project management processes, tools, governance, compliance and oversight. Yet these activities and products have done nothing to improve project success rates.

Harold Kerzner (2010) defines projects can be people failures. “Projects do not fail, People Fail”. When projects fail, we seem to go through meticulous pain to identify every cause of failure. A brief list might include:

??End user stakeholders not involved throughout the project

??No stakeholders backing and lack of ownership

??Weak business case

??Corporate goals not understood at lower levels of the organisation

??Poor financial estimates

??Unrealistic planning and unclear expectations

??Lack of project resources and experience personnel

??Poor overall project planning

??Budgets are exceeded and out of control

??Missed deadlines and no recovery plan

Friel (2017) identifies poor project performance is at three levels within an organization: Executives, Project Managers and Team members. He summaries ten reasons for project failures:

1. Poorly defined business case and planning

2. Inadequate forecasting of estimates

3. Lack of ongoing senior executive supports

4. Poor communications

5. Insufficient resources

6. Lack of project leadership

7. Scope creep

8. Inadequate stakeholder management

9. Lack of contingency and risk management

10. Unrealistic timelines and budgets

?Examples of Project Failures and Lessons Learned

1.Dyson Electric Car

Development of an electric car?Project name:?The Dyson Date:?Oct 2019 Cost: ￡500M Synopsis: The future of transportation is here to see and it is of course electric! As a result, the?development of electric cars has been a growth area for the past ten years and the pace of change continues to?grow.

Contributing factors: Lack of?upfront due diligence (failure to analyse costs, market competitive landscape, market size, production costs and profit margins). Underestimation of?costs. Perfectionism. Focal imbalance (focusing on the product rather than full spectrum of work need to launch a car brand).

2.Great Western Mainline Electrification

UK Project type: Rail infrastructure upgrade Project name: Great Western Mainline electrification project Date:?Jan 2020 Cost: ￡2B cost overrun, plus reduced scope Synopsis: The electrification of the world’s transportation infrastructure is a growing focus in many countries. Electrification allows the energy intensive industry to move to renewable sources of energy and helps contribute to climate action goals.

Contributing factors: Underestimation of complexity. Inadequate planning.?Lack of due diligence in estimating.?Lack of appropriate Project Management controls, checks and balances.

?3.Police Scotland

UK Project type: Policing information management system Project name: i6 Date:?Mar?2017 Cost: ￡200m lost opportunity Synopsis: While I often write about the direct impacts failed projects have on an organization it is also worth remember that each failed project is?an investment that failed to yield its intended benefits.?The loss of those benefits (the?‘benefits shortfall’ cost) is often a far larger impact than the direct impact of the failed project itself.

Contributing factors: Failure to prototype and maintain regular visibility into the design. Underestimation of complexity. Requirements management failures.

4.World Athletics Championships 2019

Earlier this year, the best athletes in the world flocked to Doha for the World Athletics Championships. They were forced to compete in?eerily silent stadiums ?as the host nation had failed to sell even a fraction of the tickets. The International Association of Athletics Federations has been criticised for placing money before the needs of the sport in what has been a very damaging blow to their public image.

Hopefully, lessons have been learned from this instance. It doesn’t matter how much money a host nation is willing to throw at an event, if there isn’t a homegrown fan base, then they will struggle to fill the seats and provide a memorable experience.

5.The Garden Bridge

The Garden Bridge has been dubbed a failed vanity project, pushed by Boris Johnson when her was the Mayor of London. The project cost ￡53m in total,?despite never actually being built . According to a report, the bridge was over-optimistic both in terms of the fundraising possible and the final cost. This led to a shortfall which could never be overcome, despite surveying work on the riverbed already getting underway.

Ambition is a powerful thing, but it needs to be grounded in reality, particularly when relying on fundraising to get projects off the ground. In retrospect, it would have been wise to establish if the project was feasible before spending ￡161,000 for a website.

6.The NHS’ Civilian IT Project

The project that aimed to revolutionise the?NHS IT systems was a failure ?that cost the taxpayer somewhere in the region of ￡10bn. The politically-motivated and top-down nature of the project meant that scope creep and a complete underestimation of the requirements doomed this project from the start.?

The government was later criticised for its inability to handle large IT contracts. From this, we can learn that it’s important to consider the size and capabilities of your own organisation before taking on an ambitious project.

?7.Waterworld

When shooting started for the film Waterworld, the director didn’t yet hold a finalised script. But this wasn’t the only problem to plague the shoot. The project was scheduled for 96 days of shooting, but multiple rewrites led to multiple re-shoots and this time frame was stretched out to 150 days. Making movies isn’t cheap, so this pushed production costs to $135 million over budget.

Controlling the scope of a project is essential, but this can’t be done without a proper plan in place. In the case of a movie, this means signing off the script before shooting can begin.

8.Denver International Airport

Denver International Airport set out to create the most?sophisticated luggage handling systems ?in the world. The project was soon deemed to be far more complex than anyone was anticipating and delayed for 16 months at a cost of $560 m. Large portions of the project had to be “redone” and the project was then scrapped in 2005.

This is a classic example of failing to understand the scope of the project. Ambition can often cloud judgement, and the desire to create something that has never been done before can lead people to push ahead with projects.

9.McDonald's Arch Deluxe Burger

McDonald’s put?more than $150 million into advertising —more than it had ever spent on an ad campaign—for its new Arch Deluxe Burger, only to find out its customers weren’t interested in the more grown-up, sophisticated menu option.

Lessons Learned: This is another case that highlights the importance of letting customer data drive product strategy. If McDonald’s had a more accurate picture of what its customers wanted, it could have saved millions in advertising and resources. A great way to stay on top of data is to choose a?handful of key metrics to track , make sure your tools can accurately track them in as close to real time as possible, and then always strategize based on the numbers.

10.Crystal Pepsi

Crystal Pepsi was a hit at first, and people were excited about the new version of an old favourite. But people soon lost interest and the novelty wore off, making it impossible for Crystal Pepsi to gain a strong market share.

David Novak was the COO of PepsiCo during the project and didn’t listen when bottlers told him the Crystal Pepsi flavour wasn’t quite right. “I learned there that you have to recognize that when people are bringing up issues, they might be right”.

?What Can We Learn from Project Failures?

In real life projects rarely run as planned – it’s a sad but true fact. Failures happen, but they have their positive effects too. They are a source of valuable experience and lessons that help succeed into the future. Every project failure carries with it at least one practical lesson for helping project managers to improve their project management knowledge and skills.

My own learnings from project failures are to focus on asking six specific questions:

1.Whats is the goal of the project

2. List of jobs and people accountability

3. Who is leading the project?

4. People – resources availability

5. What contingency is built into the project

6. A copy of the risk register

References

Kerzner, H. (2010) Recovery Project Management: Techniques and Tactics for Reversing Falling Projects. New Jersey: John Wiley & Sons.

Friel, P.G. (2017) “Project Manager Perceptions of the Value of Organizational Project Management” Dissertation National College of Ireland Dublin Ireland.

https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/pulse-of-the-profession-2015.pdf

(Online) Available at https://www.standishgroup.com/sample_research_files/CHAOSReport2015-Final.pdf

(Online) Available at https://calleam.com/WTPF/?tag=examples-of-failed-projects

(Online) Available at https://www.workfront.com/blog/project-failure-10-famous-failures-and-5-ways-to-spot-them-before-they-happen

(Online) Available at https://pm360consulting.ie/blog

(Online) Available at https://www.pmi.org/learning/library/delivering-successful-projects-every-time-6822

(Online) Available at https://www.trainingbytesize.com/12-failed-projects-lessons-learned/

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