Top 5 Reasons Why Contruction Project FAIL

Top 5 Reasons Why Contruction Project FAIL

A great deal of research has been done one why projects fail. The primary causal factors are poor leadership and low organizational maturity.

94 percent of variations observed in workers’ performance levels have nothing to do with the workers. Instead, most of the performance variations are caused by the system, of which those people are but a part. People can’t perform better than the system allows. - W. Edwards Deming - The System of Profound Knowledge

  • Poor communication among various stakeholders
  • Outdated contracting/procurement practices
  • Poor pre-construction planning and cost estimation
  • Frequent design scope changes and errors (due to outdated, poor processes)
  • Lack of owner leadership, capacity, accountability


"All projects are exercises in managing change. The fact that variation is going to occur (relative to planned activities and outcomes) during the project is a given. The key to consistent delivery of successful projects therefore lies in the ability to account for and/or manage variations as they occur.

The ability to successfully account for and manage change during a project lies in an organization's leadership and level of maturity relative to its strategies, processes, goals, and resources.

  • 40-50% work is either rework or not “value-added work.”
  • 85%+ of all projects are over budget (just 31% of all projects came within 10% of the budget in the past 3 years - KPMG)
  • 52%?of rework is caused by poor project data and miscommunication (2018 Industry Report - Construction Disconnected, FMI)


Mature organization don’t?react?to change, they?address change according to their programmatic process. Organizations that do not implement and continuously import upon a program-based approach, under which all projects a planned, procured, and executed, suffer from unclear objectives,?shifting requirements,?unrealistic schedules, and?reactive planning."

Poor planning and poor change management?impede individual project successes.

Real property owners, architects, engineers, and builders all would profit greatly from just applying "Change Management 101" effectively as a priority.

Change Management = Step One



Traditional construction project delivery is antiquated, outdated, antagonistic, and prone to failure. Fortunately, tools and services are available to improve organizational maturity with respect to construction planning, procurement, and project delivery. These tools integrate these core functions as well as the associated people, processes, information, and technologies involved.

The path to organization maturity with respect to the ability to fully leverage proven, LEAN and integrated planning, procurement, and project delivery programmatic methods involves stepping form one level to the next. Throughout the ongoing process, however, all of the following are addressed and/or improved upon:

  • Who can offer change ideas (informally and formally)
  • Who assesses the impact of the proposed change
  • Who?reviews the proposed change and its impact for approval
  • How is the change implemented?
  • Documentation of the outcome

As people naturally resist change, it is up to leadership to embrace and support change management. This is why, at the end of the day, leadership and organizational leadership are the primary cause of endemic project failure. Leadership is needed to fully explain the impacts of programmatic changes upon individual project's scope, budget, schedule for all participants and stakeholders. The latter includes all internal personnel and departments as well as all external services providers (architects, engineers, contractors, consultants, etc.).


Senior? management? failure is the #1 cause of poor project outcomes. 94 percent of variations observed in workers’ performance levels have nothing to do with the workers. Instead, most of the performance variations are caused by the system, of which those people are but a part. People can’t perform better than the system allows,

The role of senior? management?is to? prioritize?and clearly communicate requirements, provide resources to efficiently accomplish those requirements,? and? make decisions in support of continuous improvement.

Mature organizations management recognize change management is essential to project success and the overall attainment of best value outcomes.
Levels of Project Management Maturity
% Rework vs. Maturity Level


POOR PROJECT OUTCOMES - CAUSAL FACTORS - KPMG 2012


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D.B. Limbu

Procurement Manager at Helvetas Nepal

1 年

Miscommunication and misunderstanding among the involved parties in different segments of the construction life cycle are the key factors in the failure of construction projects.

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