The Reasons Governments Struggle To Run Projects Successfully

"The government is incapable of running projects. Their miserably high failure rates prove that governments should be out of the project management business." Looking across the table at the person who said this I remained silent waiting to hear what others would say.

I have heard similar statements many times and question their validity. Granted, there seems to be plenty of examples of failures in government projects. However, I rarely hear objective reasons for why these projects fail, nor do I see any data comparing them to private sector projects. The reason? The prognosticators purporting this are part of the problem. They are making broad generalizations based on what they have heard on the nightly news. A few years ago, though, I tried to get closer to the truth by candidly and confidentially interviewing a number of government executives and project managers to gather their views. Following is a summary of those conversations.

Different Measures of Success

How often are government projects geared to make a profit? Not often. At the time I did these interviews, there was an inordinate number of for-profits government endeavors in the US with this is a goal. This was due to the push for a US-wide healthcare solution, known as the Patient Protection and Affordable Care Act. Herein lays one of the challenges. When people who have never worked in a for-profit company are chartered to run one, their world is turned upside down. Their measures of success are not the number of people covered, mouths fed, and roofs over heads, but rather revenue, expense, cash flow, and profit. It is a different, less compassionate world that is unforgiving of financial overruns. This is not to say that public projects have less fiduciary responsibility, but the focus on the use of the money is different. Therefore, if a project to house homeless is 20% over budget, but it achieves its projected number of housed people, it is often considered successful. In the private sector, deficit spending, getting grants, raising bonds, etc. to meet that 20% overrun are normally not options. The project scope would likely be cut to achieve an acceptable positive result.

On one recent visit to one government agency that had a six million dollar overrun (35%) on a project that delivered three years late (100%) and had over a thousand bugs on release, I asked, "Would we be sitting here if the system had no bugs?" The answer came quickly, "No." The budget overrun and delays were not worthy of investigation, only functionality. Try that excuse with your private sector boss.

Periodicity Problems

Regardless of sector, corporate executives change periodically. They are terminated or retire and a new executive steps in. In the corporate world, the replacement is appointed by the Board or through a succession plan. Usually, the new leader has the same general mission and vision. Turnover in the corporate world, though, is less frequent and less radical than in governments. Governments have a very predictable cycle, with significant public influence, and a colorful political process. Every few years (two to four in most of the United States), the public has the opportunity to change the government's entire direction. This fosters many behaviors that we do not contend with in corporate life.

Waiting it out. In hopes that the next election will bring new direction. Elected officials who disagree with a direction have the ability to procrastinate and drag out projects. Just the fact that they can delay its delivery, gives them the fodder that the project is "running late and behind schedule," building their political platform.

Continual questioning. In a democracy, decisions never seem to be final. Repeatedly questioning direction or impeding progress in a corporate setting gets you fired. In the government, it can be rewarded with re-elected or election to a higher office. The ability to create and sustain roadblocks to success is far easier in the public sector.

Uncertainty. Even people with the best positive attitudes, working in an environment where there is daily questioning of the direction and uncertainty looming over a project, cannot maintain a positive attitude. Politically contentious projects create demoralized teams. The odds of success plummet.

These factors reduce the public sector project effectiveness, increase their costs, and delay their deployment.

Employee Motivation

What gets you up in the morning? Is your goal achieving new heights and creating something new or making it a day closer to retirement? Although a rash generalization, incentives for most government positions are rooted in the beliefs of the sixties—working at the same job for life. Long-term, tenured employees are good, but only if their goal is to better the organization and, in turn, grow themselves. Most corporations want people to take risks to compete with rivals and gain market share. However, governments do not have competition. A huge incentive for change is missing. Marking time and concern over rocking the boat in order to get a pension does not help projects move forward.

Democracies Versus Oligarchies

Many of us live in democracies. Personally, I love this form of government. However, it is not the ideal place to get something done. Too many people have to be pleased. People cast votes to make decisions and set directions. In a democracy, people (in reality, it could be a majority) can still disagree and fight a decision they just voted in—again, impeding progress. The difference is that in a democracy there is no CEO. Governments do not have the concept of “disagree and commit” that is a staple in the corporate world. Corporations are oligarchic societies. When the decision or direction is wrong, the company loses money. If the executives do that too many times, the company disappears. In corporations, mismanagement's reward is failure. 

Uninformed Transparency

Without a doubt, project transparency is a great thing. I am sure, though, that you do not want every mistake you make broadcasted on the nightly news (or even your boss). You make sure that as bad news is delivered, the data is accurate and understandable. In addition that news rarely gets outside the company. Corporations have a significant level of secrecy provided to private individuals.

Public sector projects, however, must be transparent since the money funding them belongs to the public. Bad news is not delivered by you, it is delivered by a newscaster or pundit who has never run a project. The result is a risk-averse culture frightened of ending up on the newspaper's front page or the nightly news. The fear of public humiliation nearly paralyzes any attempt at innovation, adopting the corporate world's tried and true processes, and even decision making.

Unequal Pay

Money is not everything, but as Daniel Pink has taught us, you need to pay enough to get money off the table. Government jobs are notoriously lower paying jobs that do not attract and retain the correct proportion of best of the best. That is surely not saying that there are not great people working for governments. There are many extremely smart and ambitious people working in government for wages well below their private sector counterparts. The bell curve, though, is skewed and the proportion of innovative ambitious people is fewer. It is not just compensation, though, few governments are known as innovation centers. It does not take long for the most altruistic employees to get frustrated because their new ideas are not considered, let alone implemented. The best of the best are quickly disillusioned and drawn away to the higher paying, more innovative corporate world.

Endless Customer Base

Finally, the government cannot choose its customers. Corporations can make very specific decisions to segment their market and only service specific customers. That could be based on the customer’s affluence, demographics, health, taste, or any multitude of factors. In general, though, governments are supposed to serve everyone. That makes systems extremely complex. To use terms that systems testers use, there are few edge cases, because the system has to accommodate every condition. “Every” is a very large number. The systems cannot ignore the rich, the poor, those with means to pay and those without. It cannot omit the healthy or the unhealthy, preexisting conditions, or anyone else. Some people may not get services, but they still need to be consciously addressed.  

Government's Disadvantage

Government projects may actually fail at disproportionately higher rates than in the corporate world, but that is not a fair comparison. There are multiple factors that make them different from or incomparable to corporate projects. There is no data, that I have found, to prove they actually run worse. As opposed to their corporate brethren, public sector projects run in the light of day, hence, every hiccup, glitch, and misstep is in full public view to be criticized by every armchair "executive." As leaders, our job is to look at the failure reasons and determine how to mitigate the risk in our projects—whether they are public or private.

Learn More

Learn more about avoiding project failure and filling the gaps that cause failures in your organization. Todd C. Williams has devoted his career to understanding and filling those gaps.

As the name implies, Rescue the Problem Project: A Complete Guide to Identifying, Preventing, and Recovering from Project Failure, an Amazon #1 bestseller, focuses on project actions.

His latest book, Filling Execution Gaps: How Executives and Project Managers Turn Corporate Strategy into Successful Projects, Mr. Williams covers the six gaps that cause projects to fail—an absence of “common understanding,” goal-project misalignment, lackluster leadership, ineffective governance, disengaged executive sponsors, and poor change management.

Todd Williams’ new book, Filling Execution Gaps is a deep dive into how to build a company culture that tilts the odds as far as possible in favor of successful execution of strategy. This book is an invaluable resource for project managers and executives alike who are working to improve their effectiveness.

Bram Kleppner , CEO, Board Member, Danforth Pewter, Middlebury, Vermont